Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, and which are applicable thereto, have been complied with, namely:—

Weardale and Consett Water Bill [Lords].
Mersey Docks and Harbour Board Bill [Lords].
Torpoint Ferry Bill [Lords].
Newport Corporation Bill [Lords].
Lever Brothers (Wharves and Railway) Bill [Lords].
Derwent Valley, Calver, and Bakewell Railway Bill [Lords].
Folkestone Corporation Bill [Lords].
Croydon Corporation Bill [Lords].
South Metropolitan Gas Bill [Lords].

Ordered, That the Bills be read a Second time.

Provisional Order Bills (Standing Orders applicable thereto complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:—

Local Government (Ireland) Provisional Orders (No. 2) Bill.

Ministry of Health Provisional Order (Southampton Extension) Bill.

Ministry of Health Provisional Orders (No. 7) Bill.

Ordered, That the Bills be read a Second time To-morrow.

Provisional Order Bills (No Standing Orders applicable),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, referred on the First Reading thereof, no Standing Orders are applicable, namely:—

Ministry of Health Provisional Orders (No. 6) Bill.
Pier and Harbour Provisional Orders (No. 2) Bill.

Ordered, That the Bills be read a Second time To-morrow.

Manchester Corporation Bill [Lords].

Read a Second time, and committed.

EDINBURGH BOUNDARIES EXTENSION AND TRAMWAYS BILL [Lords].

Captain WEDGWOOD BENN: I beg to present a petition from the citizens of the Burgh of Leith concerning the Edinburgh Boundaries Extension Bill, which seeks to incorporate the Burgh of Leith with the City of Edinburgh. The petition showeth that this amalgamation is not necessary to the natural growth of Edinburgh; that on three occasions Parliament, after inquiry, has confirmed the independent existence of Leith; that under the protection of Parliament the Burgh being independent has improved its health, increased its trade and reduced its debt charge; and that the citizens, being by an overwhelming majority opposed to the Bill, humbly pray and petition this Honourable House not to pass it into law, and that they may have such further and other relief in the premises as to this Honourable House may seem meet.

Mr. SPEAKER: My attention has been called to the fact that according to the Standing Orders a Petition relating to a Private Bill should be presented by being deposited in the Private Bill Office. As the mistake in informing the hon. and gallant Member that he could present the Petition is mine, I will ask the hon. and gallant Member to bring his Petition to the Table.

Captain BENN: In thanking you, Sir, may I point out that I did describe the petition to you in a letter intimating my desire to present the same.

Oral Answers to Questions — BRITISH ARMY.

RE-CLOTHING.

STATEMENT BY MR. CHURCHILL.

Mr. C. PALMER: 6 and 7.
asked the Secretary of State for War (1) whether, in deciding to reclothe the Army in uniform of pre-War style and colour, he has considered the cost to officers; and whether, in view of the necessity of making commissioned rank possible to young men of families of moderate means, he will reconsider his decision;
(2) whether, before committing the country to an initial expenditure of £3,000,000 in reclothing the Army in pre-War uniforms, he will give orders for pattern uniforms of khaki to be made with regimental colour and cuff facings and collar badges of one line regiment, one rifle, and one cavalry regiment, and cause these to be displayed in the Tea Room, together with the comparative cost of uniforms so adorned and made at the Pimlico factory compared with the price of pre-War uniforms?

Mr. BRIANT: 14.
asked the Secretary of State for War what is the number of khaki uniforms now in store, the number of yards of khaki cloth in store, and the number of yards of khaki cloth for which tenders are accepted?

Mr. ANEURIN WILLIAMS: 21.
asked the Secretary of State for War what is the estimated average initial cost and annual cost of maintenance to each Life Guards officer of the proposed new uniforms, including the horse furniture?

Mr. GILBERT: 22.
asked the Secretary of State for War if he has any official reports showing that the esprit de corps of the Army suffered during the War owing to the wearing of khaki; and, if not, if he will explain why it is proposed to expend £3,000,000 in obtaining uniforms of a more expensive type?

Mr. HINDS: 23.
asked the Secretary of State for War if his attention has been called to the representations of the families of officers who, in view of the high cost of living, already experience great difficulty in living on the Army rates
of pay, and who fear that they will be unable to retain their commissions if they are put to the expense of buying and maintaining pre-War uniforms; and will he take these representations into consideration?

Mr. JOHN GUEST: 24.
asked the Secretary of State for War whether tenders have yet been invited for re-clothing the Army; and what will be the average cost of providing each soldier with the pre-War uniforms?

Sir THOMAS ROYDEN: 25
asked the Secretary of State for War (1) whether the views of the rank and file in the Army on the proposal to re-introduce pre-War uniforms have been ascertained;
(2) whether, in view of the public feeling which has been aroused by the proposal to spend £3,000, on new uniforms for the Army, he will reconsider the decision to revert to pre-War uniforms?

Major WATTS MORGAN: 28.
asked the Secretary of State for War what is the estimated cost of the fur required for re-clothing the Army in pre-War uniforms?

Mr. ALEXANDER SHAW: 29.
asked the Secretary of State for War what will be the average cost to each officer of providing himself with the pre-War uniforms; and what proportion of this expense will be contributed by the State?

Mr. JOHN DAVISON: 30.
asked the Secretary of State for War if he will give details showing how the estimated expenditure of £3,000,000 on re-clothing the Army is arrived at?

Major DAVID DAVIES: 31.
asked the Secretary of State for War on what grounds it is considered that the wearing of khaki with regimental buttons and badges is inimical to esprit de corps?

Brigadier - General Sir OWEN THOMAS: 32.
asked the Secretary of State for War whether recruiting for the Regular Army is at present satisfactory; and, if so, why it is necessary to provide a new uniform as an advertisement for recruits at a cost of £3,000,000?

Mr. STANTON: 33.
asked the Secretary of State for War if his attention has been called to the smartly-fitting khaki uniforms of His Majesty's Life Guards now in London; whether, if similar results were produced by regimental
tailors in other regiments, all the smartness required for maintaining the efficiency of the Army would be attained; and whether he will reconsider the decision to expend £3,000,000 on new uniforms?

Sir ROBERT NEWMAN: 34.
asked the Secretary of State for War how much khaki cloth is now in stock?

Mr. HURD: 41 and 42.
asked the Parliamentary Secretary to the War Office (1) if he will state the detailed items of the estimate of £3,000,000 for the re-clothing of the British Army; what is the cost per yard of scarlet cloth for officers and men respectively; how does this compare with the cost in 1914;
(2) what was the approximate amount of khaki cloth in the hands of the Army authorities at the time of the Armistice and at the opening of the year 1920; what amount of khaki has been handed over to the Disposal Board or otherwise disposed of during the present year; and what is the stock now in hand?

The SECRETARY of STATE for WAR (Mr. Churchill): I propose to deal with the general aspect of this matter in a general statement. Although it may not completely answer all the points raised, I think it will be better if hon. Members have the opportunity of having this statement in their minds, and then they can see whether it is necessary to put down further questions next week.
The only expenditure which will fall upon this year's Estimates in regard to full dress for the Army is that in respect of the Foot Guards, which are to be immediately supplied with full dress during the current year. The Household Cavalry have had full dress throughout the War, and it is only a question of maintaining this. The troops, of course, have a free issue.
As regards the officers, new entrants will receive a grant of £150 towards the cost of uniform, and those who joined during the War will get £150, less the amount of outfit grant already received, which in most cases is £42 10s. The re-issue to the Guards and Household Cavalry troops of full dress stands in a special position on account of the ceremonial duties which these troops discharge in the capital of the Empire.
The extension of full dress to the other branches and units of the Service, which
my military advisers also consider desirable, will be spread over the next four or five years, unless it should be decided, when the Estimates are reviewed next year, that this programme should be abandoned. Ample notice will be given to all units, and no existing stock, either of khaki or khaki uniforms, will be wasted. Khaki with the cap or steel helmet will remain permanently the working service dress of the whole Army. There is not, nor ever has been, any question of its abolition.
The only question which is now before us is the issue of full dress uniform to the Guards, and the retention of full dress uniform by the Household Cavalry. This involves an expenditure, not of £3,000,000, as one would suppose by reading a certain class of public criticism, but of £140,000 for other ranks and £20,000 for officers. This expenditure has been included in the Estimates of the present year. If we had decided against re-clothing the Guards in full dress and maintaining the full dress of the Household Cavalry, we should have to supply them with another complete new outfit of khaki at a cost of £30,000.
The total avoidable expense is, therefore, not £160,000 but £130,000, and £130,000 and not £3,000,000 is the figure to which the Government is at present committed.
The abolition of full dress for the Household Cavalry and the Guards would mean that the Household Cavalry uniforms and the uniforms of the Household Cavalry and Guards bands, and approximately 7,000 bearskins now in stock, would become useless, and this would involve a waste of fully £80,000. The total net expense involved in re-clothing the Guards and retaining the Household Cavalry in scarlet is thus £130,000, while the total waste involved in discarding the existing stocks of full dress would be approximately £80,000. The transaction would therefore appear to be not unjustified, even from a purely financial standpoint.

Mr. PALMER: Does the right hon. Gentleman regard an avoidable expenditure of £130,000 as a matter of no consideration at a time of this kind, and does he share the view that it is necessary to buy esprit de corps at the expense of the British taxpayer?

Mr. CHURCHILL: I need not say that I shall be very ready to debate this matter in the House, if there be a general desire to do so, and an occasion presents itself. I certainly do not take the view that it is necessary to buy recruits with uniforms, but I consider that the historic uniforms of the British Army carry with them a sense of continuity and of regimental tradition, which is valuable not only for recruiting, but for the discipline, conduct and high reputation of British units; and if this can be done thriftily and frugally over a long series of years, using up every scrap of existing material, I believe it is well worth while.

Sir DONALD MACLEAN: May I ask the Secretary of State what he means when he speaks of an expenditure on the uniform for the Guards to which the War Office and this House are "committed"? Have we no control over that, or has it passed out of the cognisance of this House?

Mr. CHURCHILL: This sum was included in the Estimates. I am proceeding in the general course of the year in accordance with those Estimates, and I have given orders for the looms to be set in motion, and for the uniforms to be made.

Sir D. MACLEAN: As the right hon. Gentleman knows, those Estimates have not yet been discussed by this House in Committee. Are we to understand that, when these Estimates come before us in Committee, this expenditure will already have been incurred, and that we shall be in the particularly foolish position of attempting a reduction of expenditure which has already been incurred?

Mr. CHURCHILL: No, Sir, Considering that the financial year begins on the 1st April, and the discussion of Estimates, block by block, proceeds at varying intervals throughout the year, it is certainly nothing new for the right hon. Gentleman to discover that a large portion of the expenditure has necessarily been incurred before the Estimates are available for discussion in this House. As a matter of fact, the Army Estimates have been debated repeatedly during the course of the present year, and I referred specifically to this subject when they were last debated. The House will be committed in the sense that orders are
continuously being given in regard to expenditure, and at any stage it is only possible for the House to reverse a decision which the Government is carrying on in their name by facing the loss involved in a change of Ministry.

Sir D. MACLEAN: In view of the impossibility of debating the matter by question and answer, I beg to give notice that I shall raise it on the Army Estimates.

Mr. E. WOOD: Is it not the case that the preponderating opinion amongst regimental officers is in favour of a return to the pre-War uniform, and, further, will the right hon. Gentleman be prepared to consider some extension of the grant in the case of poorer officers?

Lieut. - Colonel Sir J. NORTON-GRIFFITHS: Is it not the case that the majority of the rank and file are in favour of the change?

Mr. PALMER: Is it part of the policy of stimulating esprit de corps to merge the Welsh and Irish Guards in the other regiments?

Mr. CHURCHILL: That is quite irrelevant and quite untrue.

Mr. SPEAKER: That is another matter altogether.

Sir C. WARNER: In view of the statement that £50 is to be granted to officers to buy new uniforms, is there any modification in the uniform to make it less expensive?

Mr. CHURCHILL: There are certain modifications in the Guards uniform, and other modifications are being considered and will be devised during the year before there is any necessity to extend it to the rest of the Army. But it is not only in the character of the uniform that modifications can be made which will avoid expense. It is in the occasions on which the uniform is worn. Those can be greatly reduced so as to make khaki the customary working and service dress, and keep the ceremonial dresses for the occasions for which they are required.

Brigadier-General Sir OWEN THOMAS: Are the Irish and Welsh Guards included in the Estimates the right hon. Gentleman has given the House?

Mr. CHURCHILL: Yes, they certainly are included. There never has been any intention of abolishing the Irish Guards. With regard to the Welsh Guards the condition of recruiting in that regiment has raised the question of its continuing as a regiment, but I certainly have expressed no opinion on the subject one way or the other. I have allowed the discussion to proceed with the various authorities concerned, and the Army Council and the Secretary of State have reserved their judgment and will be perfectly free to take it at any time.

Colonel YATE: 4.
asked the Secretary of State for War whether in re-clothing the Army in full-dress uniform he will abolish the former stand-up collar buttoning tightly to the throat which was so irksome to the wearer?

Mr. CHURCHILL: It is not proposed to abolish the stand-up military collar, which should be no more irksome to wear than the stand-up collar worn in civilian dress.

Major NALL: Is it not a fact that the civilian collar has no wire?

Mr. A. WILLIAMS: 67.
asked the Chancellor of the Exchequer on what grounds the Treasury sanctioned the proposal to end £3,000,000 on reclothing the Army?

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I understand that my right hon. Friend the Secretary of State for War has to-day made a statement showing the grounds on which this decision was reached by His Majesty's Government.

STAFF COLLEGE.

Sir HENRY CRAIK: 5.
asked the Secretary of State for War whether he is prepared to grant any extension of the age limit for entry to the staff college, in view of the fact that many officers have been prevented by service in the War from entering the college at the usual time?

Mr. CHURCHILL: In order to provide for officers who have served with special distinction on the staff or in command during the recent War, and who have not hitherto had the opportunity of graduating at the staff college, two courses, each consisting of about 110 officers, specially selected by the Army Council, have
already been assembled at the staff college in 1919 and 1920. Entrance to the third post-War course, which commences next January, will again be by direct nomination by the Army Council. This course will be divided into two categories; first, a senior division consisting of officers nominated for one year's course of instruction, and secondly, a junior division consisting of officers nominated for two years. The age limit for nomination to the senior division will be 40 years, and for nomination to the junior division 35 years, though in special cases these limits may be extended by the Army Council. As regards the course commencing January, 1922, and subsequent courses, to which entrance will be by examination, the Army Council have decided, in order to provide for officers who have been prevented by service in the War from entering the College at the usual time, to relax the pre-War restrictions with regard to age as follows: The maximum age at which an officer will be permitted to attend the examination in 1921 (for the course commencing January, 1922) will be 38 years at the date of the examination; to attend the examination in 1922 (for the 1923 course) 37 years at the date of the examination; in 1923, 36 at the date of the examination, in 1924 and subsequent years, 35 years at the date of the examination.

PRISONERS OF WAR (PAY).

Colonel YATE: 9.
asked the Secretary of State for War whether, considering that under Section 136 of the Army Act officers are entitled to full pay without any deduction while prisoners of war through no fault of their own, and in Section 985 of the Royal Warrant it is laid down that a soldier shall not forfeit his right to pay during his period of absence as a prisoner of war, unless proved to have been taken prisoner through misconduct on his own part, he will state by what Act, or under what Royal Warrant, or by what law passed by the Governor-General of India in Council, he has the right to deprive the officers of the Indian Army taken prisoners of war in the heroic defence of Kut of half their staff pay after the first two months of captivity.

Sir A. WILLIAMSON (Parliamentary Secretary, War Office): Section 136 of the Army Act does not mean that an officer is entitled to continue to draw full staff
pay apart from the conditions as to performance of the duties of the appointment and other matters, under which such staff pay is granted by Regulation. As Indian Regulations made no provision for the continuance of staff pay to an officer taken prisoner of war, a special Regulation was made on the subject, and of this Regulation the officers in question have received the full benefit. Article 985 of the Royal Warrant does not relate to officers.

4TH ROYAL IRISH DRAGOON GUARDS (PRIVATE J. H. JOHNSON).

Mr. SWAN: 15.
asked the Secretary of State for War, if he is aware that Private J. H. Johnson, No. 36,740, 4th Royal Irish Dragoon Guards, was taken into the Army under age, although his mother protested, and that before she could obtain his release she had to pay £20 bounty; and, as Private Johnson was under age, will his mother have the £20 refunded?

Mr. CHURCHILL: Inquiries are being made into this case and I will inform the hon. Member of the result in due course.

HODEIDAH.

Sir A. FELL: 16.
asked the Secretary of State for War whether two British regiments have been for some time past stationed at Hodeidah, on the Red Sea; what useful purpose they fill; and if they are there at the cost of the British or the Indian Governments??

Mr. CHURCHILL: The answer to the first part of the question is in the negative, and the latter parts do not, therefore, arise.

Sir A. FELL: If there are not two regiments, what number of troops have been at Hodeidah?

Mr. CHURCHILL: I cannot say offhand, but I do not think any force has been there for any considerable time.

Sir A. FELL: Were there not two regiments there a short while ago, if they are not there at present? My information was a month ago.

Mr. CHURCHILL: I am not quite sure. I have read the answer as it was given me£that there are not two regiments there at present.

WOMEN'S CORPS, DEMOBILISATION.

Commander Viscount CURZON: 17.
asked the Secretary of State for War how many women are now employed by the War Office on duties formerly performed by the Queen Mary's Army Auxiliary Corps, Women's Legion, and the Army Service Corps, women motor drivers, in England and France, respectively; and by what date their demobilisation will be finally completed?

Mr. CHURCHILL: There are at present 62 officials and members of the Queen Mary's Army Auxiliary Corps employed in France on duties in connection with graves registration, etc. The term of engagement of all these women expires on 31st July next. All members of the Women's Legion, Royal Army Service Corps, have been demobilized, with the exception of one official who is temporarily retained to hand over records. There are two women at home, and about 10 in France temporarily employed as civilian drivers of War Department mechanical transport vehicles. In addition, there are a certain number of women civilians temporarily employed in the commands on clerical duties which were formerly performed by members of the Queen Mary's Army Auxiliary Corps. The numbers of these could not be given without an enquiry throughout all commands.

Viscount CURZON: May we take it that no women seen in uniform are really employed on military duties, with the exception of those the right hon. Gentleman mentions?

Mr. CHURCHILL: That would appear to be a reasonable inference, but I am not quite sure that there may not be some other cases.

TROOPS, LONDON BARRACKS.

Mr. CAPE: 19.
asked the Secretary of State for War what is the number of troops now stationed at the Tower, Wellington, and Chelsea barracks; what is the number of rounds per man of rifle and machine-gun ball ammunition held in store and on issue at those barracks; and what were the corresponding figures in 1913?

Mr. CHURCHILL: I do not think it is in the public interest to publish information of this nature.

SOLDIERS' GRAVES.

Mr. GILBERT: 37.
asked the Secretary of State for War what action has been taken for the preservation and upkeep of British soldiers' graves in Austria and Italy?

Mr. CHURCHILL: The work of the Imperial War Graves Commission in Italy is well advanced, all the cemeteries having been taken over for permanent construction. There are in Italy and the Austrian borderland 94 cemeteries containing British graves, of which 17 are sufficiently large to require architectural treatment. Of these 17, contracts have been placed for the construction of 10, and work has already commenced in 5; while the erection of memorials over single graves in other cemeteries has also been started. Seventy-five out of the 94 cemeteries have received horticultural treatment. There are a few graves of prisoners of war in Austria. An officer of the Directorate of Graves Registration and Inquiries visited Vienna some time ago and arranged to be supplied with lists. These lists have now been received and are believed to be fairly accurate. Owing to conditions in Austria, no other steps have been taken up to the moment, but I hope that it will be possible to send an officer to make further inquiries shortly. As far as our information goes, the graves are well cared for.

Mr. GILBERT: 38.
asked the Secretary of State for War what action has been taken for the preservation and upkeep of British soldiers' graves in Greece and Turkey?

Mr. CHURCHILL: The Imperial War Graves Commission expect shortly to take over all cemeteries in Macedonia for permanent construction. The architects' designs have been approved, and the Greek Government are being consulted on the form of contract locally applicable. A scheme is under consideration for the concentration and treatment of graves scattered throughout the islands of the Ægean, and meanwhile the graves are being well cared for by the islanders. A unit of the Directorate of the Graves Registration and Inquiries is in Turkey (Asia Minor), registering and identifying graves and selecting sites for cemeteries.

ARABIA.

Mr. R. RICHARDSON: 1.
asked the Under-Secretary of State for Foreign Affairs if he will say what kind of support is being given to Huessin, King of the Hedjaz; when this support was first given; and if this support is being used against the Emir of Nejde?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Harmsworth): In answer to the first part of the question, I would refer the hon. Member to the reply given to the hon. Member for the Wrekin on 3rd June. The answer to the last part of the question is in the negative.

POLAND.

ATTACK ON SOVIET RUSSIA.

Mr. JAMES BROWN: 10.
asked the Secretary of State for War why, on 22nd May, the War Office accompanied its account of the military position in the Polish war with a defence of the action of the Poles in launching the attack, why no mention was made of the Soviet Government's statement that they were willing to accept any town for a peace conference in a neutral or entente country, even Paris or London, but that they could not accept a place situated in the war zone unless an armistice was first concluded?

Mr. CHURCHILL: The War Office account, to which the hon. Member refers, was merely an account of the Polish reasons for assuming the offensive. As regards the omission of which the hon. Member complains these War Office accounts do not profess to deal exhaustively with the political situation; this aspect, in fact, is only touched upon in so far as it is relevant to, and affects, the military situation. The hon. Member is, no doubt, aware that the Poles were agreeable to a cessation of hostilities on the sector of front east of Borisov, the place suggested by them for negotiations.

Lieut. - Commander KENWORTHY: Why does the War Office father this Polish offensive in the way of publishing military communiques about it, and does not that look rather like propaganda in favour of the Poles? Why is the War Office called upon to give these explanations at all?

Mr. CHURCHILL: It has been customary during the War for communications to be made by the War Office on military matters, and no decision has been taken to terminate them. I think it is very often convenient that the information which is in possession of the War Office should be made public. I fancy it is welcomed by the Press.

FRONTIERS.

Mr. MYERS: 52.
asked the Prime Minister whether the area claimed by the Poles outside their frontiers assigned to them by the Peace Conference contains a population of 73.2 per cent. of Russians, 4.67 per cent. Poles, 13.43 per cent. Jews, and 8.70 per cent. of other races?

Mr. HARMSWORTH: As the proposed negotiations between the Polish Government and the Soviet Government have not yet taken place, I am unable to say what may be the Polish claims or what the population of the area which they may desire to occupy.

Lieut. - Commander KENWORTHY: Has not the Peace Conference laid down provisionally the frontiers of Poland? Surely the hon. Gentleman knows the portions which are outside or inside those frontiers?

Mr. HARMSWORTH: Until we know definitely the claims of the Polish Government I should not like to say anything.

Lieut. - Commander KENWORTHY: May we take it that His Majesty's Government are not supporting in any way those claims outside the frontiers laid down provisionally for Poland at the Peace Conference?

Mr. HARMSWORTH: I would rather have notice of that.

IRELAND.

ATTACKS ON ARMED GUARDS.

Earl WINTERTON: 11.
asked the Secretary of State for War whether he proposes to order an inquiry into the circumstances surrounding the recent overpowering of an armed guard of His Majesty's forces in Dublin, without any member of the guard in question firing a shot, or, alternatively, if he will order a court-martial upon the officer command-
ing the battalion to which the guard belongs for allowing his battalion to be in such a state that a guard provided by it can be overawed and overpowered by a gang of desperadoes?

Mr. CHURCHILL: A Court of Inquiry has been held and further action is sub-judice.

Earl WINTERTON: 12.
asked the Secretary of State for War if any orders have been given to the General Officer Commanding in Ireland to the effect that armed guards of His Majesty's forces when attacked by desperadoes, in the possession of arms, are not to fire if they can avoid it?

Mr. CHURCHILL: No such orders have been issued.

TROOPSHIPS.

Mr. R. RICHARDSON: 20.
asked the Secretary of State for War whether the "Tsaritza," which took about 1,000 Cameron Highlanders to Queenstown at the end of May, is the same vessel that took the so-called relief force to Archangel in May of last year; whether the "Tsar" is also employed in the transport of troops to Ireland; and whether these vessels are owned by the British Government?

Mr. CHURCHILL: The answer to the first part of the hon. Member's question is in the affirmative, and to the second and last parts in the negative.

POLICE BARRACKS (ATTACKS).

Mr. ARCHDALE: 27.
asked the Secretary of State for War whether troops in Ireland are not permitted to fire on men engaged in attacking police barracks when they happen to surprise them as at Mullinavat, County Kilkenny?

Mr. CHURCHILL: No, Sir. When troops come upon men attacking police barracks they will, and do, open fire.

RUSSIA.

BRITISH MILITARY AND AIR MISSIONS.

Lieut.-Commander KENWORTHY: 36.
asked the Secretary of State for War and Air what duties the British Military and Air Missions are now performing in the Crimea and South Russia; when it
is intended to withdraw them; and whether it is expected that their withdrawal will be hastened, as a result of the conversations proceeding between His Majesty's Government and the representatives of the Russian Soviet Government now in London?

Mr. CHURCHILL: I would refer the hon. Member to my replies to his question on the 20th April last and to the question put by the hon. Member for Leyton (East) on 3rd June.

Lieut. - Commander KENWORTHY: Does the right hon. Gentleman expect to be able to accelerate the withdrawal of these officers, and can he say whether it is quite consistent with the policy laid down by the Government to keep a Military Mission of 300 officers in the Crimea fighting against the rest of the Russian people?

Mr. CHURCHILL: They are not engaged in combatant duties. Of course, they are playing a part in the reorganisation of the Army. I think the time is not far distant when their work there will be completed, and when an opportunity for withdrawing them will occur.

Lieut. - Commander KENWORTHY: Does the right hon. Gentleman mean that the Air officers are not engaged in combatant duties?

Mr. CHURCHILL: No, Sir. The Air squadrons with General Denikin have been withdrawn and there are only a few officers employed there, clearing up stores and so on.

DIPLOMATIC AND COMMERCIAL RELATIONS.

Mr. C. EDWARDS: 50.
asked the Prime Minister whether any progress has been made either in diplomatic or commercial relations with the Russian Soviet Government?

Mr. BONAR LAW (Leader of the House): I have nothing to add to the statement made by the Prime Minister yesterday.

LEAGUE OF NATIONS COMMISSION.

Mr. LEONARD LYLE: 51.
asked the Prime Minister whether the Council of the League of Nations has tried in vain for the past seven weeks to get a definite reply from the Soviet Government for
permission for a commission from the League to enter Russia and make an impartial examination of the conditions in that country?

Mr. BONAR LAW: The answer is in the affirmative.

Mr. LYLE: Is it not a fact that the Soviet Government, on the other hand, is encouraging personally conducted tours of Labour leaders and Members of the House of Commons?

Mr. SPEAKER: The hon. Member had better put that question on the Paper.

STATE OBLIGATIONS.

Mr. L. MALONE: 64.
asked whether the British Treasury at any time since March, 1917, paid or guaranteed the payment of the coupons or interest falling due on Russian State obligations; if so, what amount was thus paid or guaranteed, and when were the payments made; whether the British Treasury or any Department of the British Government now holds any such coupons or claims any such interest; and, if so, what is the amount in Russian roubles of such coupons or interest?

Mr. CHAMBERLAIN: In reply to the first and second parts of the question, as was officially announced in the Press on 28th March, 1918, the British Government from the date of the Russian Revolution up to 31st March, 1918, provided funds to meet coupons payable in London on the direct State debt of Russia and on securities having the guarantee of that country. The amount thus provided was £62,855. No similar payments have been made since that date. In reply to the third and fourth parts of the question, the coupons are held by the paying agents for the loans in question. The amount advanced constitutes a liability to His Majesty's Government of any future recognised Government of Russia.

Mr. MALONE: 65.
asked whether the British Treasury at any time between July, 1914, and March, 1917, at the request of the Czarist Government, provided or guaranteed money for the pay of Russian State coupons or interest to holders in this country; if so, what amount was so provided and guaranteed; whether payments so provided or guaranteed were at any time made good or liquidated by any Russian Government; and whether the obligation to make good any such pay-
ments still outstanding has been recognised by or been the subject of negotiations with any Russian Government or any Government holding sway in any part of the old Russian Czarist Empire?

Mr. CHAMBERLAIN: Loans were made by His Majesty's Government to the Russian Government during the period in question, but it is not possible to give an exact figure as to the extent to which the proceeds of these loans were used by the Russian Government for the service of the Russian State and guaranteed loans in this country. As regards the last part of the question, I think that I have seen statements purporting to emanate from the present Russian Government that they were prepared, under certain conditions, to recognise the international obligations of their predecessors.

Sir W. DAVISON: Will the right hon. Gentleman see that an assurance is obtained from the representative of the Soviet Government at present in this country as to Russian indebtedness to Great Britain, before trade relations are resumed with that country?

Mr. CHAMBERLAIN: I cannot undertake to deal with any negotiations that are being conducted by means of question and answer.

WAR OFFICE STAFF (REDUCTION).

Major STEEL: 13.
asked the Secretary of State for War what progress has been made during the past few months in the reduction of the staff of the War Office?

Mr. CHURCHILL: Since the 1st February last, the actual staff of the War Office has been reduced by 16 per cent. In addition, the hours of overtime worked by the remainder of the staff have been reduced by 9 per cent., which is equivalent to a further reduction of about 8 per cent. in staff, making a total reduction of 24 per cent. During the same period the in-take of papers from the public has fallen by 24 per cent., so that there has been a pari passu reduction of staff.

INDIA.

GENERAL DYER.

Mr. GWYNNE: 18.
asked the Secretary of State for War whether the question of General Dyer's conduct whilst in com-
mand in India has been referred to the Army Council; if so, when; and with what result?

Mr. CHURCHILL: Yes, Sir. As is stated in the published despatch of the Secretary of State for India to the Viceroy on this subject, the circumstances of the case of General Dyer, have been brought to notice of the Army Council by the Secretary of State for India. Secondly, the Commander-in-Chief in India has recommended that General Dyer should be retired from the Army. Thirdly, General Dyer himself has written to the War Office requesting to be allowed to make a further statement. A preliminary discussion has taken place in the Army Council, and it has been decided to allow General Dyer to submit in writing the further statement which he wishes to make.

Colonel BURN: Is the opinion of the Army Council in unison with the opinion expressed in Lord Hunter's Report?

Mr. CHURCHILL: It would be improper for the hon. and gallant Gentleman to ask questions in regard to confidential business of a Council of this character, and it would certainly be very improper for me to offer him any enlightenment.

TERRITORIAL ARMY.

Mr. PALMER: 39.
asked whether considerable economies, without loss of service efficiency, could be obtained by holding staff appointments to the Territorial Forces, with the exception of the general officer commanding the division and a staff captain, in abeyance until such time as the Territorial Army has been fully raised by the county associations; and whether further economies, without loss of efficiency, could be effected by dispensing with commandants commanding brigades and brigade-majors to the Territorial Forces except when such force are undergoing their training?

Mr. CHURCHILL: No, Sir. The work of reconstructing the Territorial Force demands the services of the full staff allowed by establishments and all the officers are actively employed. With regard to the latter part of the question, I would point out that it is during the period of individual training that brigade commanders and their staffs are afforded
an opportunity of gaining personal knowledge and experience of subordinate officers which are of such value when the higher training is carried out.

NAVAL AND MILITARY PENSIONS AND GRANTS.

COMMISSIONED ACTING PAYMASTERS (GRATUITY).

Mr. E. WOOD: 40.
asked the Parliamentary Secretary to the War Office what gratuity it has been decided to allow to commissioned acting-paymasters in respect of their service; and why these officers are not graded with regard to gratuity in the same manner as other commissioned officers in His Majesty's forces of corresponding rank?

Sir A. WILLIAMSON: These officers receive a gratuity under Army Order 437 of 1919, namely, one month's pay for each complete year of service. If the hon. Member will refer to the Army Order he will see that they are treated in the same manner as other classes of officers not remunerated at Pay Warrant rates.

Mr. WOOD: Is the right hon. Gentleman aware that in spite of what he has said, considerable dissatisfaction exists among this class of officer, and will he be prepared to see a small deputation and allow them to state their own case to him?

Sir A. WILLIAMSON: I think it would be better in the first instance if the hon. member would convey to me the dissatisfaction that he says exists, and then I will have it considered.

Sir P. LLOYD-GREAME: Is it not a fact that the men have been pressing their case on the War Office for the last 18 months, and repeated applications have been made to the right hon. Gentleman and his predecessor to consider this case, which is quite anomalous in regard to the commissioned officer?

Sir A. WILLIAMSON: I am not aware of what took place before I took office; but there have been some applications.

Sir S. HOARE: Will the right hon. Gentleman receive a small deputation on the subject?

Sir A. WILLIAMSON: I will give the matter consideration.

ADMINISTRATION COST.

Mr. HOGGE: 79.
asked the Minister of Pensions what is the cost of administration, the number of pensions, and cost per pension awarded during the quarter ended 31st March, 1920, for the United Kingdom and each region, respectively?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Major Tryon): The total cost of administration (including the staff of the Ministry, the regions and local war pensions committees, and the cost of operating medical boards, but excluding Ministry hospitals) was about £1,100,000 for the quarter ended 31st March last. During that quarter about 106,000 first awards of pension or gratuity were made, and 280,000 were renewed on further medical examination. The total expenditure cannot as yet be fully apportioned among the various regions, because not all the regional offices have yet been able to take over the full quota of cases. The cost of administration divided by the number of cases in which pension or gratuity (including allowances to dependants) were warded or in payment during the quarter was approximately 6s. 3d. per case, but I would point out that this figure is wholly misleading, since it takes no account of the very large number of cases dealt with under other provisions of the Warrant or Regulations, e.g., by medical treatment, by supplementary allowance, etc.

Mr. HOGGE: Can the hon. Gentleman say whether the cost of the regions is higher than in London?

Major TRYON: The cost of the new regional arrangements can only be ascertained when it has been working some time.

Colonel ASHLEY: Does the hon. Gentleman anticipate that the cost of administering pensions will go down in future years?

Major TRYON: I hope the administration will be greatly reduced. It is obvious that as time goes on, the number of Medical Boards will be reduced, and they form a very heavy item in the expenditure.

RING PAPERS.

Mr. HOGGE: 80.
asked the Minister of Pensions what is the number of cases in
which pension committees have been obliged to advance money to persons on account of the non-receipt of or errors in ring papers from the Pension Issue Office and the total amount of such advances for the quarter ended 31st March, 1920?

Major TRYON: I regret that the information desired by the hon. Member is not at present available.

Mr. HOGGE: Can the hon. Gentleman say what is the present difficulty in issuing pensions from the Pension Issue Office, Baker Street?

Major TRYON: I do not know to what difficulty the hon. Gentleman refers.

Mr. HOGGE: Is the hon. Gentleman aware that the administration of the issue of pensions from Baker Street was never worse than it is at the present moment?

Major TRYON: I am not prepared to accept that statement, but anything we can do to improve it will be gladly done.

ALTERNATIVE PENSIONS (INQUIRIES).

Mr. HOGGE: 81.
asked the Minister of Pensions whether inquiries respecting pre-War earnings of applicants for alternative pensions have been transferred to county court registrars; whether such inquiries are made by the registrar personally or by bailiffs of the county courts; what fee is paid; and to whom?

Major TRYON: Inquiries respecting the pre-War earnings of men in employment are now being carried out generally by registrars of county courts, except in the London area and in Scotland, where the work is done by special whole or part-time inquiry officers in the direct employ of the Ministry. The registrar is directly responsible to the Ministry for the inquiries which he makes personally or which are made under his direction by his staff. The Ministry reserve the right to cancel the arrangement in any case where they consider it is not working satisfactorily. A fee of 10s. is paid to the registrar for each case, except where the registrar is a permanent Civil servant, when a reduced fee is payable.

Mr. HOGGE: Is it the fact that a bailiff has the right to investigate the domestic affairs of the widow of a soldier?

Major TRYON: The second part of my answer mentions powers reserved by the Minister enabling him to deal with this point.

Mr. HOGGE: Will the hon. Gentleman see that the widows of these men do not have their domestic affairs investigated by an ordinary bailiff?

Major TRYON: This objection will certainly be considered.

BURTON COURT, CHELSEA.

Lieut. - Colonel Sir SAMUEL HOARE: 84.
asked the Minister of Pensions whether he is aware that Burton Court, Chelsea, was only leased to the Government for the duration of the War; and, if so, what is his reason for attempting to make it the permanent centre for his scheme of pensions decentralisation?

Major TRYON: The answer to the first part of the question is in the negative. As regards the second part of the question, my hon. and gallant Friend is no doubt aware that the responsibility for providing accommodation for the staff of this Department rests with my right hon. Friend the First Commissioner of Works

Sir S. HOARE: Do I understand from the hon. Gentleman that the plan for the decentralisation department going to Burton Court in no way prejudices the question at issue as to the occupation of Burton Court by Government offices?

Colonel ASHLEY: May I ask if the Ministry of Pensions insist on staying on and are pressing on the First Commissioner of Works to let them remain on there?

Major TRYON: We cannot undertake to remove at an early date seeing that the whole of our machinery and records are installed there.

Sir S. HOARE: Is the hon. Gentleman aware they will have to leave if the Commissioners of Chelsea Hospital refuse to continue the lease?

Major TRYON: I hope the Commissioners will bear in mind the necessities of the Ministry of Pensions.

GERMAN AIRSHIPS.

Lieut.-Commander KENWORTHY: 43.
asked the Secretary of State for Air what
is intended to be done with the ex-German rigid airship L 71; will it eventually be used for commercial, naval, or military purposes; and, if commissioned for Government use, what will be the estimated annual cost to the Crown?

Viscount CURZON: 44.
asked the Secretary of State for Air whether L 71 Zeppelin airship has as yet been surrendered; where she will be stationed and to what use it is proposed to put this airship; how many airships are now under construction; and what use it is proposed to make of them when completed?

Mr. CHURCHILL: The airship L 71 has not yet been surrendered. It is expected that she will be handed over within the next few weeks, and the intention is that she should be housed in the first instance at Pulham, Norfolk, Airship Station. Airships under construction at the end of the War and still completing are R 36, R 37, R 38, and R 80. Of these the R 38 will be handed over under arrangements made for sale to the United States of America when completed. Work on the other three is proceeding slowly in anticipation of an arrangement being made for their employment for commercial purposes. This question, it is hoped, will shortly be decided. The ultimate disposal of L 71 will also be settled in all probability by the same decision. In any case, it is anticipated that information of great value will be obtained from the trials of this German airship. The annual cost to the Crown if this vessel were to be commissioned for Government use, will be very largely dependent on the amount of airship material obtainable under the terms of the Peace Treaty from Germany and the present condition of the ship. It is, therefore, impossible at present to give any useful estimate of the amount.

Mr. HOUSTON: Can the right hon. Gentleman say why this airship has not already been handed over by Germany? Was it not completed?

Mr. CHURCHILL: Yes. I think it was completed. We are not at all dissatisfied with the way they are carrying out this portion of the Treaty.

CZECHO-SLOVAKIA.

Mr. R. RICHARDSON: 47.
asked the Prime Minister whether, under the new constitution of the Czecho-Slovakian Republic, any question of war must be brought before the Chamber; whether, for a declaration of war, the presence of two-thirds and a majority of two-thirds of the Chamber is necessary; and whether he will consider the advisability of instituting by legislation a similar check on the power of the executive of this country?

Mr. BONAR LAW: Under the constitution of Czecho-Slovakia the President can only declare war with the consent of the Assembly. This assent must be given by a three-fifths majority of all members. I do not think there is any need to alter the constitution of this country in the manner suggested.

FOOD SUPPLIES.

HOME GROWN SUGAR, LIMITED.

Mr. C. WHITE: 49.
asked the Prime Minister if he will state what is the financial position of the Home Produced Sugar Company, Limited, in relation to the Government; what is the capital of the said company; whether any part of such capital is found by the Government; whether any of the directors of the company are Members of Parliament; if so, what are their names, and what yearly fee or salary is paid to each; whether the Government have any voice in the appointment of such Members as directors; and whether the Government pay the whole or part of such directors' salaries?

The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Sir Arthur Boscawen): The company known as Home Grown Sugar, Ltd., to which the hon. Member presumably refers, was registered on the 13th February, 1920, with a nominal capital of £1,000,000, divided into 1,000,000 ordinary shares of each. The Government agreed to subscribe for a number of ordinary shares (not exceeding 250,000), equivalent to the number allotted to public subscribers. The total number of shares issued by the company is 500,000, of which 250,000 have been allotted to the Government. No shares have been allotted otherwise than for cash. The
Government have guaranteed a dividend of 5 per cent. per annum upon the capital subscribed by the public up to 250,000 shares for the period ending 31st March, 1930. The directors may at any time after repayment to the Minister of Agriculture of any sum paid to the company under the guarantee call upon the Minister to sell his shares upon payment of their par value, together with a deferred dividend of 5 per cent. upon such shares as from the date of allotment.
Three of the directors of the company are Members of Parliament, namely, the hon. and gallant Member for the Ludlow Division of Salop; the hon. and gallant Member for the Rye Division of Sussex; and the right hon. Member for Norwich.
The remuneration of the directors, other than the managing directors, is at the rate of £300 per annum for each director, and an additional sum of £100 per annum is paid to the chairman for the time being of the board of directors. The Government have no voice in the appointment of Members of Parliament as directors. The Minister of Agriculture is, however, entitled to appoint a director of the company to act as the Government's financial representative, and such financial representative has been appointed. The directors' fees are paid by the company, but the fees of the financial representative are paid over to the Ministry, and the financial representative is paid an equivalent amount by the Ministry in place of receiving his remuneration direct from the company.

CHURCH OF SCOTLAND.

Mr. MacCALLUM SCOTT: 53.
asked the Lord Privy Seal whether he is advised that the draft articles declaratory of the constitution of the Church of Scotland in matters spiritual, if given legislative effect to, would render it possible for the funds which are the religious patrimony of the Scottish nation to, be diverted without the consent of the State from the support of the doctrines to which they are at present by Act of the Scottish Parliament devoted, and devoted to the support of the religious doctrines of a body which might by successive schisms be reduced to a small section of the nation; whether he is aware that many members of the Church and others believe that the power
given by Article 8 to the Church to interpret, modify, or add to the articles would make this possible; and whether, before committing the Government to support legislation embodying these articles, he will provide facilities for such proposed legislation being discussed in the House.

Mr. BONAR LAW: I have already informed my hon. Friend, in reply to questions put yesterday and in the course of last week, that the Government are aware of the point of view stated in his question, and that it will receive consideration in consultation with their legal advisers. I fear I can give no undertaking in the sense suggested in the last part of the question.

NATIONAL EXPENDITURE.

Mr. G. LOCKER-LAMPSON: 54.
asked the Lord Privy Seal whether he will consider the appointment of a Select Committee of this House, with power to take evidence, for the purpose of estimating the amount of public expenditure that this country can reasonably afford, taking its income into account?

Mr. BONAR LAW: I do not think that the appointment of such a Committee would lead to any useful result.

Mr. LOCKER-LAMPSON: Have the Government made any estimate as to what approximately is the national expenditure?

Mr. BONAR LAW: The work suggested for this Committee is precisely the work that has to be done by the Chancellor of the Exchequer.

Mr. LOCKER-LAMPSON: Are the figures used as a basis for all Government expenditure?

Mr. BONAR LAW: I do not follow what my hon. Friend means.

Mr. LOCKER-LAMPSON: Have the Government got the figures showing what the national income is, and are those figures used as a basis for what the Government ought to spend on public purposes?

Mr. BONAR LAW: The Government have not formed the idea that they are able to take the whole of the national income.

FINANCE BILL.

WAR WEALTH LEVY.

Mr. DOYLE: 56.
asked the Chancellor of the Exchequer whether he is in a position to make any definite statement respecting the levy on War fortunes in lieu of the increase of the tax on excess profits to the extent of an additional 20 per cent.; and, in view of the anxiety in business circles, and the uncertainty on the part of the investing public, when he will be in a position to make a final pronouncement on the matter?

Mr. CHAMBERLAIN: The decision of the Government was announced yesterday. For any further information, I must ask my hon. Friend to await this afternoon's discussion.

INCOME TAX (WAR STOCK).

Sir M. DOCKRELL: 70.
asked the Chancellor of the Exchequer how many millions of pounds were paid away in War stock interest on the 1st instant, which would have remained in hand if interest had been taxed at the source; and, seeing that the Revenue loses the use of this money for an average of 15 months, employs a large extra staff in the effort to collect it, and loses a large percentage of it in bad debts, will he consider whether a statement of Income Tax can be sent with the warrant, offering a discount if paid within a month, the receipt for its payment by the bank from which the warrant is issued being the voucher to the Inland Revenue authorities, and corresponding to the vouchers attached by joint stock companies to their payments of interest or dividend?

Mr. CHAMBERLAIN: The amount paid in interest on 5 per cent. War Loan and 5 per cent. Exchequer Bonds, 1920, was approximately 444,500,000, on which Income Tax at 6s. in the pound would be nearly £13,500,000, much of which would be subject to claims for abatement. Payment without deduction at the source was promised to registered holders under the prospectuses of these issues, and I cannot vary this arrangement. Moreover, I am advised that, in view of the character and methods of graduation of the Income Tax, my hon. Friend's proposal would not be practicable. The Royal Commission on the Income Tax reported against any extension of discount for prepayment of tax.

Mr. A. M. SAMUEL: Will the right hon. Gentleman consider the advisability of allowing the Bank of England to retain the Income Tax, provided the owner of the stock gives a written request that such Income Tax may be retained?

Mr. CHAMBERLAIN: I certainly will consider that.

Sir M. DOCKRELL: May I ask the right hon. Gentleman whether he does not think that the use of £13,500,000 for 15 months is a serious question worth considering? He has himself invited Members of this House to make suggestions, and I think that is a business suggestion.

Mr. CHAMBERLAIN: If my hon. Friend will be good enough to read the answer, he will see that the £13,500,000 never reaches the Exchequer. That would be the amount if all the recipients were liable to the full rate of the tax.

Sir M. DOCKRELL: Is the tax not deducted at the source at 6s. in the pound, irespective of what it may ultimately have to be? Therefore the £13,500,000 is deducted at the source.

EXCESS PROFITS DUTY (IRELAND).

Mr. LYNN: 71.
asked the Chancellor of the Exchequer whether he can state the amount of the Excess Profits Duty collected in Ireland during the financial year 1919–20?

Mr. CHAMBERLAIN: The Excess Profits Duty collected in Ireland during the financial year 1919–20 amounted to £7,198,000.

AGRICULTURAL WHOLESALE SOCIETY.

Lieut.-Commander KENWORTHY: 59.
asked the Chancellor of the Exchequer whether he has yet received any refund of the moneys advanced to the Agricultural Wholesale Society to liquidate their commitments in cattle-feeding stuffs; if so, how much has been received; and, if not, what prospect is there of obtaining a refund?

Colonel LAMBERT WARD: 68.
asked the Chancellor of the Exchequer whether the Government has yet received any refund of the moneys advanced to the Agricultural Wholesale Society to liquidate their commitments in cattle-feeding
stuffs; if so, how much; and, if not, what prospect is there of obtaining such refund?

The MINISTER of FOOD (Mr. McCurdy): I have been asked to reply. Amounts have been received from time to time against sales in respect of stocks taken over by the Ministry of Food on account of the Agricultural Wholesale Society and in reduction of the advance to the Society. The total receipts to date amount to £208,837.

MEMBERS OF PARLIAMENT (SALARIES, ETC.).

Mr. WHITE: 60.
asked the Chancellor of the Exchequer whether he will grant the return asked for by the Member for West Derbyshire [Members of Parliament (Salaries, etc.),—Return giving the names of all Members of Parliament holding any Government office in the financial year ending on the 31st day of March, 1920, the amount of any salary, fees, subsidies, grants, or expenses paid or allowed to each such Member during that period apart from any salary he may receive as Member of Parliament, together with the date of such appointment; the names of any Members of Parliament who have received briefs from the Treasury or any other Government Department during that period, together with the fees paid in respect of such briefs; and also any fees and expenses paid or allowed to any Member of Parliament not holding Government office in respect of any services rendered during that period.]

Mr. CHAMBERLAIN: The preparation of such a Return as that asked for by my hon. Friend would involve a considerable amount of clerical labour and the value of the Return would be in no way commensurate with the work entailed. But if, however, the purposes for which the hon. Gentleman desires the information would be met by a Return on the lines of the somewhat similar Return prepared in 1918 on an Order of the House dated 21st February, 1918, I should be glad to issue the necessary directions.

Mr. WHITE: I shall have to be satisfied with what I can get.

Mr. CHAMBERLAIN: Perhaps the hon. Gentleman will be good enough to look
into it to see whether it is worth having. I do not want to go to that length unless he thinks that it is worth having.

Mr. WHITE: I have made up my mind on that point.

Sir M. DOCKRELL: 69.
asked the Chancellor of the Exchequer if he can arrange that orders for payment to Members of this House shall be either stamped or freed of stamp so that enfacement or endorsement of signature will be sufficient discharge for the amount involved?

Mr. CHAMBERLAIN: The question whether it would be possible to arrange that orders for payment to Members of this House should bear an embossed stamp would be one for the consideration of the Clerk of the Fees whose duty it would be to ensure that the appropriate deduction on account of Stamp Duty should be made from the amount of salary paid to Members. The exemption of these orders from payment of Stamp Duty would require legislation and I see no reason why exceptionally favourable treatment should be accorded in this matter to Members while no such concession is made in the case of any other salaries paid by the Crown.

Sir M. DOCKRELL: Why, when an ordinary payment is made by cheque which bears an embossed stamp the signature of the payee is considered a sufficient discharge, should there be this pettifogging exception in the case of Members of Parliament?

Mr. CHAMBERLAIN: I think that the hon. Member is mistaken if he supposes that the endorsement on a cheque is proof of payment. It may be prima facie evidence, but, speaking subject to correction, I do not think that it is proof.

HOUSING.

LOCAL BONDS.

Mr. MALONE: 66.
asked the Chancellor of the Exchequer whether he expects the public to subscribe in any quantity to the 5 and 6 per cent. Housing Bonds when there are other Government securities available for 7 per cent.?

The MINISTER of HEALTH (Dr. Addison): I have been asked to answer this question. Experience gained up to the present indicates that Housing Bonds,
the interest on which is usually 6 per cent., have been taken up readily in many parts of the country, and I have every hope that the issues will be successful if they receive the support to which they are entitled on all sides. My hon. Friend should remember that the interest on Housing Bonds is assured for a term of years, whilst there is no security that the rates of interest to which he otherwise refers will continue to be received.

Colonel ASHLEY: Is the right hon. Gentleman aware that the success of these bonds is gravely imperilled, owing to the impression that the cost of housing is very much in excess of the real requirements?

Dr. ADDISON: Of course the cost of housing must, to a certain extent, I agree, affect the matter prejudicially, but I would welcome any practical suggestion as to how that cost should be reduced.

Mr. HOPKINSON: Is the right hon. Gentleman aware that the issue of these Housing Bonds, and the campaign that is being conducted to make them a success, is resulting in numerous persons who have lent money to local authorities at low rates of interest calling up those loans, and thus reducing many local authorities to a state bordering on bankruptcy?

Dr. ADDISON: I have no information to that effect

LICENSING REGULATIONS, WALES.

Brigadier - General Sir OWEN THOMAS: 72.
asked the Home Secretary whether the licensing regulations are in force in certain coast areas in North Wales on excursion steamers sailing on Sundays between Liverpool, Llandudno, and Anglesea, while compulsory Sunday closing of public-houses obtains in all Welsh areas; is he aware that numbers of men make a practice of travelling both ways by these steamers that day and drinking continuously, landing at Llandudno and elsewhere in an intoxicated condition, to the great annoyance of the inhabitants; and what action, if any, can be taken to stop this Sunday drink traffic?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): I have made inquiry of the police of Liverpool, Carnarvonshire (for Llandudno), and Anglesey, and their reports do not support the allegations contained in the second paragraph of the question. The reports, dated 4th and 5th June, show that no trouble has arisen during the two previous Sundays during which the steamers in question have plied this year.

Sir OWEN THOMAS: May I ask whether the bar of a steamer is considered to be "licensed premises"?

Mr. SHORTT: They can sell liquor at the bar of a steamer, if that is what the hon. and gallant Gentleman means?

CENTRAL RESEARCH INSTITUTE, HAMPSTEAD.

Colonel BURN: 73.
asked the Home Secretary whether he has received a petition from the inhabitants of Hampstead as to the treatment of a dog at Mount Vernon; and, if so, what action does he intend taking?

Mr. SHORTT: I have received a memorial from certain residents at Hampstead, complaining of the barking of a dog at the Institute at Mount Vernon, on and between 1st April and 7th May. I have made inquiry, and am assured that there was no dog at the Institute during a considerable part of that time. I am satisfied that the memorialists must have made a mistake as to the place from which the noise they complain of proceeded.

ALIENS (LANDING RESTRICTIONS).

Mr. DOYLE: 74.
asked the Home Secretary the number of German aliens who have been allowed to land on these shores since the signing of the Armistice; how many of these have been admitted since the beginning of the present year; and what steps are being taken to prevent the landing of German aliens under cover of Swiss and Scandinavian passports?

Mr. SHORTT: Detailed statistics from the date of the Armistice up to 1st July, 1919, are not available, but practically
the only persons of German nationality who were admitted to the United Kingdom during that period were British-born wives or widows and their children. Between 1st July and 31st December, 1919, 925 Germans were admitted, of whom 550 were British-born wives or widows, and of the remainder, the great majority were the children of such wives or widows. Between 1st January and 30th April, 1920, 1,554 Germans were admitted, of whom 586 were British-born wives or widows and their children. The hon. Member will recollect that the landing of former enemy aliens, other than British-born women, in this country is governed by Section 10 (1) of the Aliens Restriction (Amendment) Act, 1919, which lays down inter alia that permission may be given only for short periods. The passports and other papers of all aliens entering the United Kingdom are carefully scrutinised, and there is no reason to fear that Germans are gaining admission under the guise of Swiss or Swedish subjects.

SOVIET COMMITTEES (GREAT BRITAIN).

Mr. DOYLE: 75.
asked the Home Secretary whether he is in a position to give the number of Soviet committees established in South Wales, in Glasgow and Scotland generally, and the industrial centres of England; if there are very strong bodies of the same at Slough motor depôt; and what steps, if any, are being taken to ascertain and make public the source whence the funds are derived to carry on the active propaganda disclosed during a recent trial, when certain Irish Guardsmen admitted to having received various sums of money from a Bolshevist agent who was sentenced to a term of imprisonment?

Mr. SHORTT: I would refer the hon. Member, as regards his first point, to the reply which I gave to his question of the 13th May last. There are, or were, a few extremists employed at Slough, but they could not be described as constituting a Soviet. The funds employed for improper purposes in the case referred to in the last part of the question amounted to a few pounds only, and there is no evidence that the person who distributed them was a Bolshevist agent.

Lieut. - Commander KENWORTHY: May I ask the right hon. Gentleman whether he puts the existence of extremists at Slough down to the evidence of waste and muddle by this Government?

Mr. SHORTT: No, Sir; I am not responsible for that.

MOTOR LICENCES (INSPECTION).

Viscount CURZON: 76.
asked the Home Secretary how many controls were established by the police on the roads of Great Britain for the inspection of motor licences between the 22nd and 31st of May under a General Order of the Home Office; how many police were so employed; if possible, at what cost; whether this action was taken universally: if so, for what reason the General Order was issued; whether more than one control was established on any one road; and, if so, for what reason?

Mr. SHORTT: No controls were established by the police under any General Order of the Home Office, because there was no Order on the subject. What actually happened was that the Commissioner of the Metropolitan Police, after prominent warning in the Press, decided to establish a number of controls during May to check the use of indistinguishable identification marks and devices for escaping identification, and at his instance it was suggested to County Chief Constables that, if they contemplated any similar action, it might be taken at the same time. I cannot give the number of controls established by the local police; the number in the Metropolis on the 22nd May, the last day on which special observation was kept, was about 60.

Viscount CURZON: Is the right hon. Gentleman aware that I was stopped no fewer than three times in a distance of about 30 miles on the road to Ipswich, and was asked for my licence, and that it required eight constables to do it?

POLICE PENSIONS.

Sir W. JOYNSON-HICKS: 77.
asked the Home Secretary what is the police pension in the case of a constable who entered the service in 1892, and served 26 years, retiring in 1918; and what is the
pension of a constable who entered two years later, served a similar period, paid similar amounts to the superannuation funds, and retired in 1920?

Mr. SHORTT: The amount of pension to which a constable is entitled on retirement depends upon his rate of pay at that date, as well as the length of service. In the case of the Metropolitan Police, a constable who retired in 1918 with the service mentioned received a pension of £69 11s. 6d. per annum if the retirement took effect on or before 2nd September, or of £92 3s. 8d. per annum if it was after that date, whereas a constable who retires in 1920 with the same service is entitled to a pension of £165 4s. 8d. per annum. The latter officer would have contributed rather more to the Superannuation Fund than the former, but in either case the amount contributed by the constable is only a very small fraction of the value of the pension.

Sir W. JOYNSON-HICKS: Does my right hon. Friend think it fair that a constable who retires now should get £160 a year as pension, and that one who retired only two years ago, having completed exactly the same service, should get only £60?

Mr. SHORTT: I should be very sorry to reduce the present rate.

Sir W. JOYNSON-HICKS: Would the right hon. Gentleman not consider the case of those pensioners who, having served well, retired on account of age or because they were invalided, in 1918?

Mr. SHORTT: Personally, I have no power to do anything in the matter.

Mr. ROBERT YOUNG: 78.
asked the Home Secretary what is the minimum number of years' service of a policeman to entitle him to a pension if unable to fulfil his duties through disablement or ill-health; whether a policeman who has put in a qualifying period for a pension under such circumstances is paid such pension should his disablement or ill-health be the result of war service; and, if not, will he state whether deferred pay is always refunded?

Mr. SHORTT: Under the Police Acts, 15 years' service is the minimum period for pension for a police constable retiring on account of ill-health, but in case
of disablement due to an injury received in the execution of duty, he is entitled to a pension whatever his length of service. In the case of a constable incapacitated while in naval or military service during the War, the police authority have power under the Police Constables (Naval and Military Service) Acts to make him an allowance from police funds, in addition to the pension he receives from naval or military funds. Police authorities have, so far as I know, exercised this power to the fullest extent the law permits. If a constable retires without pension the deductions made from the constable's pay are refunded, except in cases of grave misconduct.

SHIPPING (WHEAT IMPORTS).

Mr. HOUSTON: 85.
asked the Parliamentary Secretary to the Ministry of Shipping whether he has any information to the effect that the Argentine Government intend to prohibit the export of wheat; and whether the Ministry of Shipping is still directing large numbers of steamers to proceed to the River Plate for the purpose of loading wheat for this country?

The PARLIAMENTARY SECRETARY to the MINISTRY of SHIPPING (Colonel Leslie Wilson): In answer to the first part of the question, I have no information beyond what has appeared in the Press. No ships have been directed to the River Plate to load wheat for two months.

Mr. HOUSTON: Is it not the fact that the Wheat Commission demanded from the Ministry of Shipping a great many more steamers than they were able to provide cargo for, that many have been lying idle in the River Plate, and that steamers are now on their way to South Africa by direction of the Ministry of Shipping?

Colonel WILSON: No, Sir. I have carefully gone into the question, and no ship has been directed for the last two months. It is the fact that there is a large amount of tonnage available at the present time owing to the difficulties as to securing wheat. A great deal of that tonnage may have to be diverted to where wheat is available.

Mr. HOUSTON: Can the hon. Gentleman tell me, seeing that the Ministry of Shipping has outlived its usefulness and has now become an expensive incubus, when will it be abolished?

Colonel WILSON: I do not think that arises out of the question.

INVERGORDON HARBOUR (TRANSFER) BILL.

Lieut. - Commander Kenworthy, Mr. Neil Maclean, and Major William Murray nominated Members of the Select Committee on Invergordon Harbour (Transfer) Bill.—[Colonel Gibbs.]

FERTILISERS (TEMPORARY CONTROL OF EXPORT) BILL [Lords].

Read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 135.]

STANDING COMMITTEES (CHAIRMEN'S PANEL).

Mr. JOHN WILLIAM WILSON reported from the Chairmen's Panel: That they had appointed Mr. Mount to act as Chairman of Standing Committee B (in respect of the Increase of Rent and Mortgage Interest (Restrictions) Bill).

That they had appointed Mr. Macmaster to act as Chairman of Standing Committee D in place of Mr. Mount (in respect of the Trade Union Ballot Bill).

Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Lieutenant Colonel Buckley; and had appointed in substitution: Mr. Godfrey Locker-Lampson.

Report to lie upon the Table.

CORPORATION OF LONDON (RATING OF RECLAIMED LANDS) BILL [Lords].

Reported, with Amendments; Report to lie upon the Table, and to be printed.

PRIVATE BILLS (GROUP E).

Sir WILLIAM HOWELL DAVIES reported from the Committee on Group E of Private Bills; That, for the convenience of parties, the Committee had adjourned till Tuesday next, at half-past Eleven of the clock.

Report to lie upon the Table.

MESSAGE FROM THE LORDS.

Ministry of Health Provisional Order (Birkenhead Extension) Bill,—That they have come to the following Resolution, namely: "That it is desirable that the Bill be referred to a Joint Committee of both Houses of Parliament."

Government of India Act, 1919 (Draft Rules),—That they have appointed a Committee consisting of seven Lords to join with a Committee of the Commons to revise the Draft Rules made under the Government of India Act, 1919.

That they propose that the Joint Committee do meet in Committee Room A on Monday the 14th of June, at half-past Two of the Clock.

So much of the Lords' Message this day as relates to the place and time of meeting of the Joint Committee on Government of India Act, 1919 (Draft Rules), considered.

Ordered, That the Committee appointed by this House do meet the Lords' Committee as proposed by their Lordships.—[Lord Edmund Talbot.]

Message to the Lords to acquaint them therewith.

Orders of the Day — WAR WEALTH LEVY.

Mr. CLYNES: I beg to move,
That this House, realising the serious effects upon trade and industry of the nation of the enormous financial burdens resulting from the War, regrets the decision of His Majesty's Government not to impose special taxation upon fortunes made as a result of the national emergency and declares that in order to meet the present financial burdens and assist in liquidating the National Debt, further measures should be adopted for raising revenue from accumulated wealth.
This Motion results directly from the announcement made in the House yesterday by the Chancellor of the Exchequer. The importance of the subject raised may be measured by the statement made by the Committee which recently investigated this subject of war profits. In the earlier part of their Report the Committee state that they
Commenced their investigations into the subject covered by the terms of reference by examining a carefully considered scheme prepared at the suggestion of the Chancellor of the Exchequer by the Board of Inland Revenue. The scheme was submitted to your Committee by means of a series of five memoranda which have been printed in a form of a Command Paper.
Therefore, we begin the consideration of this Motion with the knowledge that long ago the Chancellor of the Exchequer thought the subject of sufficient importance to instruct his officials to prepare a scheme upon the question and submit it for the consideration and judgment of this particular Committee. The Committee, in the course of its labours, report that they found, leaving out of the question all persons whose post-war wealth does not exceed £5,000, that a sum of £2,846,000,000 is in the hands of some 340,000 persons, as the aggregate increase of their wealth during the period of the War. The Committee has had to deal with a very complex question, and one of the very highest national importance. I heard yesterday, as I am sure the House did, with a great deal of apprehension and disappointment, the announcement made on behalf of the Government of its intention not to take action on the lines of the views laid down in the Report of this Committee. What appeared to some of us as rather a promising effort, has ended in the announcement to the country
offering no prospect of immediate relief from the financial strain felt by the great mass of the people. The right hon. Gentleman the Chancellor of the Exchequer almost from the first advocacy of the question of a levy upon capital has emphatically declared his hostility to the policy of such a levy, and hinted that should this House at any time require that policy to be carried out, another Chancellor of the Exchequer would have to be found. On that account, I regret all the more the policy, which he had to announce yesterday, because it seems to me that if we are not to pursue this path of revenue relief and obtain as much as possible of what we regard as ill-gotten wealth, either deliberately or automatically secured during years of artificial trade while the War was on, if we are not to seek financial relief on these lines, it would appear that, as far as the Chancellor of the Exchequer can, he has barred completely the path to redress in relation to the capital levy.
That drives me to the conclusion that the business men Members of this House, if I may use the term, will have to prepare themselves for not merely a continuance, but probably an increase of those hardships and limitations of which they complain in relation to the Excess Profits Tax. if we set aside the tax on War wealth as not defensible on grounds of policy, or, as the Chancellor of the Exchequer said yesterday, as having such disadvantages as to outweigh the advantages, and if we are not even to consider the question of a levy on the capital of the country, then we are driven back upon this third plan, which has been so strongly opposed by a large number of Members of this House—I refer to the plan of exacting large sums from what are termed excess profits. I speak perhaps little for business Members of this House, or for what I may term the direct trade or merchant interests, but I can assure hon. Members and the Chancellor of the Exchequer that we are as anxious as are other Members of this House to raise revenue in a way that will inflict the least possible loss or inconvenience upon the trade or business conditions of the country. Commerce depends upon confidence, upon foreknowledge, upon an absence of all that fear and apprehension aroused in the
minds of business men as to what might befall them in matters of taxation and financial exaction, and therefore we are as anxious as any to inflict as little irritation as possible and no injustice whatever upon those who have the commercial and trading sides or the manufacturing interests of this country in their keeping.
4.0 P.M.
We do not press forward this question of a tax on war wealth without having the support of men in high quarters, who, as economists and as financiers, have some reputation. A good deal of the evidence presented to the Committee was in strong support of the policy approved by the Committee, and I would like to quote to the House two statements by Dr. Stamp. He gave evidence at length before the Committee, and as a statistician and economist he commands the respect of all who may hear him, and, speaking of the method and of the effect of this particular plan, Dr. Stamp said:
Exaggerated views are held upon the extent to which payment of the tax will take money out of industry. Only a small proportion of the cases are those in which the wealth is not held in negotiable and transferable forms. It is, however, essential that the instalment system shall be so devised that the tax may be borne as lightly as possible. It will probably have the effect of increasing the real capital of the country considerably more than would be the case if there were no levy. As a tax its real personal effect is the curtailment of future annual receipts, but its intentions are to pay off substantial debt at a time when prices are high, and to form a decisive turning point in the ever upward trend of inflation.
Speaking of the amount, Dr. Stamp gave a figure to the Committee which I would like to bring to the notice of the House. He said:
I think that this tax is the best method of getting the money to reduce the floating debt. I would not like to undertake a scheme that would produce less than £500,000,000. I should prefer to see £750,000,000, but I would agree to the lower figure, feeling that the necessary turning point will be obtained.
Yesterday, in spite of this evidence from this prominent quarter, and in spite of the embarrassments of the Chancellor of the Exchequer himself with regard to raising the necessary revenue to meet our enormous obligations, we had nothing but the announcement that this proposed plan is so beset with disadvantages that the Government cannot pursue it. It is
claimed that the Government of this country represents the general opinion of the electorate. I venture to say that I do not think there is a single Member of this House who would allege that, if this direct and simple issue could be submitted to the popular will, it would not receive national approval. Nothing could be more popular, and I think nothing could be more profitable, than to strain every nerve that the Government can to bring back into the coffers of the State these millions which clearly accrued to individuals who were not engaged in the ordinary risks of the War, but who—at any rate, many of them—were able to remain at home engaged in other branches of war service, but, on account of the conditions prevailing in war time, were able, by the terms of their contracts and by the artificial nature of the conditions, to derive means altogether in excess of the profits in ordinary trade and business. If this question could be submitted to the country there would be almost a unanimous and enthusiastic approval of any step which the Government were prepared to take to bring back this wealth into the coffers of the State. Such a step would not merely bring to the country very great financial relief, but I am of the opinion that its moral and psychological effects would go very much further than I judge the Chancellor of the Exchequer yesterday thought when he made his announcement, for there is nothing tending more to create discontent and real anger in the minds of a large number of people in this country than the knowledge—not merely the thought or idea, but the definite knowledge—that while so many men have died for their country in foreign lands others have been able to remain at home and now find themselves possessed of fortunes as the result of the War. There is a quite natural desire that in our handling of the problem of finance, now that the War is over, there should be some levelling up as nearly as possible, and that what we talked of as "sacrifice" while the War was on should be made a real and actual thing now that the War is over. If the Chancellor of the Exchequer is not to pursue this line in spite of the testimony presented to what may be termed his Committee and in spite of the view of that Committee, then I think the House this afternoon is
entitled to ask what other extraordinary line he proposes to follow in future to meet the extraordinary financial situation. I hope that he does not contemplate contenting himself with a continuance of ordinary methods of taxation. The financial problem is an extraordinary problem, it arose from extraordinary causes, and it must be met by extraordinary means. This is one of the extraordinary means which I say would have met with general national approval, and, incidentally, it would have effected the least disturbance and dislocation of trade and business interests, and would have inflicted the least injustice upon those who might have been called upon to hand over any considerable sums to the country. The Chancellor of the Exchequer is faced with a very formidable floating debt, amounting roundly to some £1,200,000,000. By what method does he propose to find the necessary funds to deal with that floating debt, if he is to discard the extraordinary opportunity which these large reserves of wealth afford him?
I should be the last in this House or anywhere else in any way to criticise, not to say impugn, the disinterestedness and purity of motive of the Chancellor of the Exchequer. His past personal proofs of disinterested public service fortify him against any suspicions of that kind. I would like, however, to ask for a little information. What was the effect on the mind of the Cabinet and of the Members of the Government collectively of the Memorial which we read was signed by a very large number of Members of this House protesting against any proposals to tax or requisition War wealth. I have read that about 124 Members signed some Memorial which was presented to the Government. I do not want to say anything which might appear improper to Members of the House, but I should have hoped that the richer Members of the House, at any rate, would have hesitated to sign a Memorial of that kind. They ought to have left the Government absolutely free from any kind of threat or from anything flavouring of intimidation if they cared to take the extraordinary step involved in this particular measure. Such a step at such a time was scarcely seemly on the part of Members of this House who might personally be involved in any action which the Government might
be inclined to take. We on this side of the House are sometimes described as class representatives and as being here to serve some large yet class interest relating to a particular section of the community Nothing could more classify hon. Gentlemen who signed this Memorial as class representatives of the very worst kind than such representations at such a time. It was precisely the time when the Government should have felt the fullest sense of freedom, and, I should have hoped, a sense of confidence from having the knowledge of the backing of their supporters in taking a step which in the nation's interests it might have been of the highest importance to take. I hope, therefore, that the Chancellor of the Exchequer, who, as I say, could not personally be governed by such representations, will give us some information this afternoon as to what effect that formidable Memorial had on the Cabinet and on the heads of the Government in dealing with this question. I observe that the Committee, in presenting their conclusions, have admitted that the practical difficulties in the path of this plan could be overcome, and they put their views in these terms:
After a close examination of these questions and consideration of the evidence, often of a conflicting character, the Committee have come to the following conclusion. They are of opinion that, although the administration of a tax of this character would involve many difficulties, yet those difficulties should not be insurmountable, and in its main features the scheme of the Board of Inland Revenue, as now amended, is practicable in an administrative sense, inasmuch as:—(a) The examination of taxpayers' returns, valuation of property, and assessment and collection of duty could be carried out in an effective and impartial manner; (b) The cost of administration and collection, having regard to the amount of the estimated yield, would be small.
That evidence proves clearly that here was a large sum of wealth which could be easily acquired at no very great expense in the national interest, and which would involve few, if any, of those enormous practical difficulties sometimes incidental to the institution of new forms of taxation. Even if enormous difficulties stood in the part of this plan; we should still be of the opinion that the difficulties could be faced and overcome. We had to face enormous difficulties to win the War; we should now be not less concerned to win a real state of peace in the minds of the people, and we should
not be deterred by administrative considerations or practical difficulties in approaching those who may have these reserves of wealth in their keeping. When the War was on no difficulty, however formidable, which had to be overcome as a contribution to winning the War was shirked. Men for various personal, or business, or conscience considerations gave reasons why they could not take part in the War. The country swept them aside. Tribunals were instituted, and all of us were called upon to serve in one way or another so far as we could give a contribution of service. No consideration of a personal character deterred the Government of the day from calling for every energy which every individual could contribute as part of the needs of his nation. We had a census of men. Many of them were not fit; many of them were physically unfit or temperamentally unfit. As a matter of training and conscience, they protested their unfitness. It did not matter; they were compelled to come forward and serve their country. The country first asked them to do it, and, when they refused and did not voluntarily respond, the country made them.
I want seriously to put to the House the view that we should look upon wealth in these days of peace in precisely the same way as we looked upon life during the late War. No matter what the consideration was, life, property, and conscience had to be swept aside if a contribution of physical service could be given to win the War. That was the primary consideration, and that service had to be given. I am not alleging that this war wealth is all the result of some pursuit of personal interest. I had to serve for a short time in a State Department during the War, and men came forward and told me that they could not help making huge profits owing to the conditions under which trade had to be conducted while the War was on. am not, therefore, altogether thinking of these men in a mind of censure when I refer to the fact that they gained inordinately as a result of the War. I am putting to the House the view very strongly that all this reserve of wealth is a reserve which quite properly and without injustice the country could now requisition as a financial contribution to the service of the country in times of peace in the same way that it requisitioned every form of personal ser-
vice to win the War when the War was on. I do not think that any Member of the House can regard it as a just thing that we should look lightly upon the service of life in the War and look timidly or with great concern upon the service of wealth in these post-War days. I press the view that, as the highest possession which we had, that of life, was exacted as a war contribution, the highest possession that a man can have in these days of peace, namely, his wealth, should be reasonably placed at the disposal of the country to enable us to reach something like a pre-War condition of finance.
I have said that there is in the minds of a large mass of people a sense of very strong resentment at the great inequalities which the War revealed, and, indeed, which were incidental to a condition of war, not merely during the years of war, but also since its close. There could be no equality of sacrifice in the service of the War. Those who served at sea, those who served as mine sweepers, and those who served at points of danger did their duty beyond words of praise. That service was done by all classes. It is not too much to say that in that period of supreme service the poor man was at least equal to the rich in the sense that he gave his life for his country as the rich man did, and I for one, thinking especially of the first year or two of the War, remember with gratitude how the middle-aged men of the well-to-do part of our community responded to the call voluntarily to serve their country and faced the trials and sufferings of the soldier in those days. Just as they did that voluntarily, the poor men did it also voluntarily, and responded to the more pressing call as the years of the War advanced. These poor men are suffering. It is true we are trying to level up their means of subsistence by advances in wages, but the cost of living is high. It is true it has been done, but that is not the permanent condition of things which any Member of this House would care to contemplate. This condition of high prices, the disturbed rate of exchange, the low purchasing power of money, the high wages—these are not the permanent condition of things we desire. They have been the temporary makeshifts to which we have been driven as the result of the War, and our plea is to get back to something like the normal, and we shall not take one single step towards the normal
so long as we have this heavy burden of taxation, so long as we have this great dead-weight debt as well as the floating debt.
Therefore it would be as a contribution towards something like a pre-War state of finance that we ask the Chancellor to support this plan of requisitioning a large part, if not all, of this improperly acquired wealth derived during the years of war. It is easy for any Member of this House to criticise any particular scheme. I hope the Chancellor will not limit himself to a criticism of the particular plan submitted from this Committee. This is a great question of principle rather than one of a particular method or a particular scheme. We can find fault with details. It is easy to show that this or any other plan could not be equitable, could not be just as between man and man, and that it would involve some people in very great inconvenience. Those are only the most elementary truths relating to any kind of taxation if applied to anything and at any time, and in face of this extraordinary financial situation it is unusual courage and daring that are required on the part of the Chancellor. I am certain that if the Chancellor sets aside completely this plan, he will be driven more and more to what even he will regard as the more extreme measure of relief, namely, the capital levy, which he has previously rejected.
As my last word, let me press the view that it is not right that the Chancellor of the Exchequer, as the financial head of the Government, should fail to use his power to secure these war fortunes which accrued to men, not as a result of their service, not as a result of any kind of personal sacrifice which they made in the national interest. He, I am certain, will agree if I say that the War, which gave a grave to so many hundreds of thousands of our men, ought not to give affluence and exceptional wealth to this considerable number of persons named in the Report of this particular Committee. They have this wealth as an incidental and inevitable condition of the War. It is the business of the Chancellor of the Exchequer to get all, or as much as possible of that £2,000,000,000 odd, and I cannot believe that any Member of this House, recognising the financial difficulties of his country, even though for a
moment he might, on grounds of policy, sign a requisition against this plan, would fail to do his duty, and pay off as much as the Government thought it proper to call upon him to pay, as a necessary contribution towards bringing us nearer that state of peace of mind from which, unhappily, at the moment we are still far removed.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): My right hon. Friend is a singularly fair controversialist, and we all recognise the serious way in which he approaches these great questions. I am glad that it is he who has opened this Debate this afternoon, and I hasten to reassure him against one anxiety which has been passing through his mind. My right hon. Friend is afraid that a memorial, signed by a certain number of Members in this House, of which I have read in the papers, but which I have not read otherwise, unduly affected the mind of His Majesty's Government. I think that the mind of His Majesty's Government was sufficiently indicated in our deliberations before that memorial reached anyone, but I do not wish to quarrel with any of my hon. Friends who have appended their signatures to that memorial, or any other memorial. But may I say that, while I have the profoundest respect for the judgment of this House or of Members of this House, given in the Lobby and in the House itself, after, or in the course of, public and informative debate, I do not attach unlimited importance to memorials signed even by great numbers of Members? I have found, in the course of my experience, that the purveyor of memorials is like the importunate suitor, who is apt to exact a signature which is given as the shortest way of getting rid of him. The fact that a Member in the Lobby, in deference to the cause of friendship or the desire for escape, has signed his name to a memorial, must not be taken as necessarily meaning that that is his considered and final opinion on a great question.
I never much like troubling the House with purely personal matters, but I hope that the House will forgive me if I say a word or two as to my own relation to this suggested tax. We are accustomed in these days to read in the papers all that has taken place in the Cabinet. One
day I see my right hon. Friend the Secretary of State for War is maintaining garrisons, or pressing expeditions, in regions far removed from us, against the wishes of the whole Cabinet. Another day I read that the Chancellor of the Exchequer is vainly fighting for a cause which he has deeply at heart, but with which his colleagues have no sympathy. I am told it is said that, in the Cabinet decision rejecting the proposal for a levy on war wealth, I have received a great rebuff. May I advise hon. Members not to attach undue importance to rumours of this kind, bred of ignorance, impregnated by malice, which are ludicrous to those of us who sit in the Cabinet and know what proceeds there? I only dwell upon this matter in the present connection because I think the consistency, or, at any rate, the reasonableness of the course taken by the Chancellor of the Exchequer is not wholly his own affair, but is a matter of some public concern, considering the great interests with which he has to deal, and for which he is responsible to this House and to the country. Anybody who recalls, as my right hon. Friend the Member for Peebles (Sir D. Maclean) recalled, my first observations in the House on the subject of war-wealth, will know that I did not approach the question as a convinced or enthusiastic supporter of the idea of a levy. I dwelt upon the very great practical difficulties of imposing such a tax. I dwelt upon the extreme difficulties of reconciling the broad general lines of equity on which such a tax must proceed with justice in individual cases, and I hesitated a doubt as to the wisdom of extending to the sphere of taxation that retrospective legislation which the House generally views with great jealousy in all other cases. I was pressed to consider the matter further. I came to the conclusion, and the Government came to the conclusion, that no Debate in this House without inquiry, no answer given, as it were, ex cathedra from the Treasury Bench would carry conviction to the mind of the country or set this question at rest.
My right hon. Friend even now has spoken of the proposal which we are considering as a direct and simple issue, which, if laid before our countrymen, would receive their almost universal approval. Whether it received their approval would depend very much on how you stated the case, and whether they
were informed upon all it involves, and if you attempt to state it in a direct and simple way, you can only attain that directness, or at least that simplicity, by the suppression of facts which are material to the judgment for which you ask. It is not a simple issue. It is a most complicated one, and a most difficult one, as the deliberations of the Committee have shown, and I think the Committee, if I may pay this compliment to them, have done a most useful work, both in elucidating what is involved in the imposition of any such levy, the fears and anxieties to which such a levy, even on the most restricted scale, would give rise, the large concessions and exceptions which must be an intrinsic part of it, and in reducing to something like a practical form those vast, vague millions of which my right hon. Friend opposite and others have spoken as the likely produce of the tax. We accordingly proposed that the matter should be referred. My attitude was one of entire neutrality. I refrained from expressing any opinion for or against. Let me say in this connection that it is really of importance that it should be understood that the Board of Inland Revenue did not appear as advocates of this proposal or any particular proposal. They appeared as servants of the State acting under the directions, first of the Chancellor of the Exchequer, and then of the Committee, to lay before the Committee all the information at their disposal, and to produce schemes on whatever lines the Chancellor of the Exchequer before the meeting of the Committee, or the Committee after its meeting, might desire to have laid before it.
I appeared before that Committee on three occasions, once as a witness giving evidence, and twice in conference with the Committee at their request. Hon. Gentlemen who were on the Committee know that at no one of these meetings did I appear as the advocate of the tax or an opposer of it. From first to last I have done my best to get the subject fully, fairly, and impartially investigated. If in the last speech I made in this House I seemed to dwell, and did dwell, much more upon the advantages of the tax than upon its disadvantages, it was because I thought that the proposal was in danger of not receiving from the general world of commerce and finance a fair consideration of its merits, that
they were not looking at it in the light of the alternative which would be necessary if it were not adopted, and that they were giving an insufficient attention to what my right hon. Friend has well called the psychological aspect of a tax or levy upon increases of wealth occurring during the War. For myself, I have watched the inquiry and, especially on occasions when I have met the Committee, I have devoted my mind to the same subject to which they were devoting theirs; and the result has been to make me feel continuously and increasingly that the fiscal merits of the levy were less even than I should have anticipated, but that what my right hon. Friend has called the Psychological, or what you may call the broad political advantages of the levy in response to an ill-defined and often ill-informed public sentiment were far greater than were generally recognised.
I come to the Committee's Report. As I said, my own feelings were that the more you considered the proposal the less were its fiscal advantages manifest, and the greater seemed to me its psychological disadvantages. What was the Committee's Report? My right hon. Friend (Mr. Clynes) spoke yesterday of the Government declining to adopt the Committee's recommendation. He used almost similar, but slightly more guarded, language to-day. Let us at least have clearly in our minds what the Committee say. In the first place, they turned down absolutely the first scheme which had been prepared, by my instructions, by the Inland Revenue. I indicated to the Inland Revenue, as a preliminary to the inquiry, that they should seek to obtain by the levy no less than £1,000,000,000. The Committee found that no sum approaching £1,000,000,000 could be levied without disastrous inequity and injustice. In the second place, the Committee declared that the scheme for £500,000,000 was practicable on a number of conditions, the chief of which, for my present purpose, is that War securities should be accepted in payment of the duty at not less than the issue price. Lastly, the Committee deliberately refrained from expressing any opinion as to whether a tax of this description was desirable or expedient as an alternative to the Excess Profits Duty, or the taxation of profits in any other form, and said that that was a
question which they must leave to the Government and to the House of Commons.
That is not a recommendation! That is not approval of the tax! Reading the Report, and using such sources of information as are open to all, I am led to suppose that, if the draft report of my hon. Friend the Chairman (Sir W. Pearce)—to whom I am particularly indebted for the heavy and responsible task he undertook, and the ability with which he discharged it—had been a direct approval of the levy, the Committee would have decided otherwise than they did.
At this stage, having called the attention of the House to the exact scope of the Committee's Report, let me ask the House to pause and consider what were the arguments with which the War levy was originally supported and the principal objects which those who advocated it had in view. I think the objects were twofold. The arguments were naturally connected with the two objects. The first object was to get at those who had made money out of the War. That is the direct and simple issue which my right hon. Friend would put to the country. I have no doubt that he would find for the abstract proposal a very widespread measure of support. But then the Committee has shown that you cannot make that distinction. You cannot draw the line between those who made money out of the War and those who increased their wealth during the War, but not out of the War. They have shown that it is impossible so to frame your tax that it will hit the improper or exorbitant profits which my right hon. Friend described as the suitable object for the tax, so as to hit them and let other wealth escape. They have shown that no clear distinction is possible in such a levy between increased wealth due to increased earnings and increased wealth due to rigid economy and patriotic saving. They have shown that there are no means by which you can get an equal contribution from those who made money, but spent it freely during the War, and those who made money as freely, but, in deference to appeals made to them, saved it, and invested it during the War.

Sir F. BANBURY: Hear, hear!

Mr. CHAMBERLAIN: In not one of these matters can you do precisely or with anything approaching precision what it
is your object to do. In not one of these matters can you, with anything like accuracy, satisfy the test of the direct and simple issue of which my right hon. Friend spoke. The most you can do in respect to anyone is to attain to some rough approximation, which, by means of wide exemptions and abatements—often with large injustice to the particular individuals—will yet save a proportion of what you want to save, though not the whole of it.
What is the second object of the advocates of the tax? It is to reduce the floating debt. The two objects were referred to in my right hon. Friend's speech to-day. The Committee have shown that as an expedient for the reduction of the floating debt a War levy is a broken reed. The total sum which the scheme which they think we might present to the House is calculated to yield is £500,000,000. In passing, I ask how much it would actually yield after it had stood the fire and test of debate and criticism of the passage of such a Bill through this House. My right hon. Friend the Member for Paisley appeared the other day as the chief mourner at the obsequies of the Land Values Duties.

Mr. ASQUITH: No, no! I lamented the absence of the chief mourner.

Mr. CHAMBERLAIN: I thought that my right hon. Friend offered himself as a substitute, and that he discharged the functions admirably, though with somewhat of a Hibernian tinge of merriment, as if at a wake. These taxes, as introduced, would have produced money, but after they had stood the fire and criticism of all the hard cases which the House could not stomach, and which the Government could not justify, issued in a costly valuation which has never paid for itself. [HON. MEMBERS: "Hear, hear."] I hope I am not unduly anxious, but I have some ambitions, as Chancellor of the Exchequer, and one of them is to avoid a very contentious measure resulting in a very costly valuation, and yielding at the end no revenue or comparatively little revenue. Suppose you get the whole £500,000,000. Suppose I took the scheme as it stands and filled in the details in such a way that there would be no danger of the yield falling below £500,000,000. How is that going to help me with the floating debt? In the first place, I must receive in payment of the
duty any Government war issue at the price of issue. That is the condition laid down by the Committee, and, I think, a very proper condition. Of course, it will be to the interest of everyone to pay in existing stocks rather than in cash. The greater part of the money which will be received will be received not in cash, but in Government securities. It would go to the reduction of debt, but not to the reduction of the floating debt. How long would it be before I received the £500,000,000? It would take a year to get a provisional valuation, and it will not be final then, but still at the end of the year occupied in legislation on the first provisional assessment you might begin to collect the tax. In the course of the next two years, in three altogether from now, you might collect £350,000,000 out of the £500,000,000. The remaining £150,000,000 has to be spread in instalments over a period of perhaps ten years in order to avoid financial disaster to particular individuals who could not meet the capital obligation in a shorter time. To put that forward as a royal road for paying off the floating debt is really to show an utter lack of appreciation of the competency of the means for the end which is proposed.
As a fiscal expedient the levy is a failure. It is shown to be a failure. £350,000,000 in three years from now. Why, Sir, the Excess Profits Duty in the same period will produce nearly twice as much if profits continue at anything like the present rate. Observe that the two are alternatives. I never suggested that you could collect both the levy and the Excess Profits Duty at the rate of 60 per cent. this year, or at a high rate for the next two or three years. The Committee expressly treated the War levy as an alternative to either the present Excess Profits Duty or to any other form of taxation which might take its place. Accordingly the Exchequer would be a loser by the exchange. We do better with the Excess Profits Duty than we do with the War Levy. I beg the House to observe that it is not as if in the main the two taxes fall upon wholly different classes of the community, or as if one tax was paid by the poor and the other by the wealthy. The two taxes in the main, and, broading speaking, fall upon the same classes, and largely upon the same individuals.
As one of the many deputations with which I have discussed this problem said to me, if you decide that the patient is to take his medicine, surely he may be allowed to express some preference as to the form in which he will take it. Assuming there is a certain amount to be paid, and that is common ground, and assuming that the same people have got to pay it, I, at any rate, as Chancellor of the Exchequer, am not ashamed to say that I would sooner take the money from the individual to be taxed in the way that is least painful to that individual. As to the opinion of the people who have to pay the one tax or the other there can be no doubt. I do not say there are not exceptions. Of course there are. I have never known a case where you have consulted experts where you could not find some experts to take the contrary view, but as to the general consensus of opinion there can be no doubt. The whole world of banking, commerce, finance, and industry, much as they dislike the Excess Profits Duty, much of my time as they have taken up in denouncing it and insisting on its intolerable character, prefer the evil that they know to the more vague and less precise, and therefore the more terrible evils of a War levy. Is there no reason for it? I have done my best to bring home the dangers which lurk in the solution which they have chosen, so that they should not take it with their eyes closed.
Now I think I am free to say—Is there nothing to be said on their side? Is there no reason for their fears? The world of finance and commerce, not only our own world here, is not in a profoundly stable condition. Troubles have arisen in Japan which had their repercussion in America, and were again re-echoed here. For the first time there have been signs of a check in the great prosperity which has prevailed since industry was re-established after the War. Every business needs much more capital to conduct the same trade to-day than it needed before the War. The State and local authorities have need of capital and are making great demands upon the money market. Traders have stretched their credit to the uttermost. Bankers have lent as much as they ought to lend, and indeed have exceeded the proportion which is proper in respect of their resources and commit-
ments. That is not a situation with which you can lightly play hazardous experiments. One false step producing one serious bankruptcy might bring a whole train of evils in its wake, the extent and duration of which not one of us can measure.
I am not altogether surprised at the fears which were expressed, though I confess I was surprised at their depth and at their universality. They were fears amounting almost to a panic, and bear in mind that fear is itself an element, and a most important element, in producing the very dangers which we dread. If there be enough in the general conditions to make men anxious lest there should be some great financial or commercial disturbance, if you then take some measure which they think is likely to precipitate that disturbance, then each of them will run about trying to save himself in time, and the result of their combined fears will be that the very catastrophe will be upon you which you are trying to avert. That is the position. I think that there is need for caution in such circumstances, and the fact that this is, as my right hon. Friend said, an extraordinary tax is not to my mind a commendation for it.
Why are these fears felt in industry? My right hon. Friend said that employment depended upon capital feeling confidence, and having foreknowledge of its liabilities. It is the feeling that this levy strikes at the confidence which capitalists have hitherto felt, and prevents foreknowledge of a man's liabilities or fore-planning to meet them that is the gravest objection to the tax. There is no precedent for a levy of this kind, or indeed for any levy on capital in any civilised country. The only levies on capital that I know of at all are one in Germany before the War, and another in Italy. They were assessed upon capital, but they are not as severe a strain upon revenue as our own Income Tax. The so-called German levy was, I think, £50,000,000 all told spread over five years, and it does not compare with our Income Tax, in fact, it does not begin to compare with it, and it is deceiving ourselves to talk of that and the Italian tax as being in the nature of what we are discussing as a capital levy. When we do these things we do them thoroughly. Our Income Tax is a real tax. Our capital levy would be intended to be something that you could not meet
out of income, but which demanded a sacrifice of capital. There is no precedent for that. If you once do it under whatever pressure, what guarantee can I give to those who pay that it will have no successor. What guarantee can my right hon. Friend offer that if he does it now and for war wealth only, under the peculiar circumstances under which that war wealth was accumulated, he will be no party, or his friends will be no party, to repeating the tax without his excuse and without the same justification. It is the insecurity which the idea of the tax brings, which is the first objection.
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The second objection is that, at a time when every business needs more capital, and every business is strained to find resources sufficient to take advantage of the opportunities which are open to it, and which we want to see developed, you will withdraw capital from business by your levy. The extent of that withdrawal I know is disputed. My right hon. Friend quoted Dr. Stamp in this and in another connection. I have had the advantage of seeing Dr. Stamp since he gave his evidence, and I think he will not object to me saying what he said to me, that if he were going before the Committee again to-day he would modify his evidence, at any rate, in two particulars. In the first place he saw that the tax would be less effective than he had supposed as a remedy for the Floating Debt. In the second place he saw that the alarm amongst all concerned in industry and finance was infinitely greater than he had expected. After all, businesses do not have much idle capital. Almost every business in the course of a year is living in part on an overdraft or a credit allowed by the banks. You cannot take the resources of the partners without affecting the credit of the business in which they are partners, for the credit of the business in the eyes of the banker is the credit, not only of the business, but of the partners whose resources are behind it. Another and greater difficulty is this. In levying a tax on the basis proposed you are going to levy a tax on values which have already partly fallen off or on capital which, although made during the War, has since been lost. I heard a case stated by one of my colleagues. It was in his own personal knowledge. A man had actually extended his works at the invitation of and under the pressure of the Government
during the War, and he found that his extended works were a white elephant to him when War ceased. In the course of the first year after the cessation of War he had lost one-third of the whole capital which he had accumulated during the War. All values are uncertain. Prospects are uncertain, and, if you cannot say what they will be, you may be quite certain that the taxation as on the value of June, 1919, will be on values which have already partly disappeared and may further disappear at any moment. I doubt profoundly whether anybody in this House could get a Bill through which did not allow you to substitute the value at the date of assessment for the value at the close of the War, or some date between those times.
But last and most important of all is the uncertainty in which the tax would involve every business man for a period of one year as a minimum, and very likely two years, before his assessment was definitely regulated and agreed to. A year for your machinery and for your first provisions; another year—and it may be more than a year in many cases—before the final assessment can be made—and through all that period the man himself would not know what proportion of the capital which was nominally his own, really was his own, and nobody to whom he applied for credit, no bank or any other institution, would know what was the amount of the security against which they were lending. I think that is the gravest of all the objections to the tax.
I submit that you cannot obtain the particular moral or psychological object which the advocates of the tax profess to seek in a levy on war wealth. As a mere revenue resource it is far inferior to the Excess Profits Duty. No one can pretend, even though he be a strenuous advocate, that it is not an expedient of a novel character which might be made the precedent for much worse proposals, which, in a rather difficult and delicate situation might cause an amount of panic and disturbance which the general conditions of the world, and of our country in particular, do not allow us lightly to go through. It is for these reasons that we have decided that we will not make any proposal in this sense to the House of Commons. It would not obtain the moral effect which its advocates have thought it would. It would not obtain the fiscal advantage; it would not materially help
us in the reduction of the Floating Debt. The Excess Profits Duty is more remunerative to the Exchequer. It is preferred, with their eyes open, by the classes who have to pay. That being so, they have had their choice and I shall now ask the House to maintain the Excess Profits Duty for this year at 60 per cent. I shall have to ask the House to maintain the Excess Profits Duty, or its equivalent, which I have not yet found. [An HON. MEMBER: "You will have to increase it!"] I make no pledge, but I do not contemplate increasing it. It is, however, in my contemplation that it shall remain at 60 per cent. for this year and continue for a longer period than it otherwise would have needed to do. Lastly, since that is the choice, the Excess Profits Duty must be paid by the people from whom it is due and they must not come to me and ask me to allow them to hold over the tax which is due to the State for an indefinite period.
In saying this, let me say also that I desire to recognise, and I hope my right hon. Friend the Member for Miles Platting does recognise, the spirit in which the well-to-do and the rich have borne the immense financial sacrifices which have been asked of them during the War. They have been borne as patriotically as any sacrifices called for from any class of the community. An hon. Member opposite sneers. I do not know why. The greatest sacrifice of all—the sacrifice of blood—was made in equal measure by all. The financial sacrifice was made, as it rightly should be, in far larger measure by the well-to-do. It has been made by them almost without a murmur, to their credit be it said. Do hon. Gentlemen realise what they have done, and what the contribution of wealth has been? I do not speak of the Excess Profits Duty, which was first 50 per cent., then 60 per cent., and then 80 per cent. I do not talk of the special levy on controlled firms. But look at what has happened? In 1913–14, the last peace year, indirect taxation was 42.5 of the whole. To-day it has sunk to 33.25. Direct taxation in 1913–14 was 57.5; to-day it is 66.75. Of the indirect taxation in 1913–14, the sumptuary taxes—the taxes on luxuries, on beer, tobacco and wine—were 35 per cent. of the whole. To-day they are only 26.19 per cent. The other taxes on tea, coffee and the like were 7.5 of the whole indirect taxation in
1913–14. They are only 6.3 to-day. Meanwhile, look at the progress of direct taxation. Income Tax has risen from 1s. 2d. to 6s. in the £. There have been large abatements, but the abatements have not been for the well-to-do. Super-tax has risen from a maximum of 6d. to a maximum of 6s. Death Duties have been raised at every point of the scale on estates above £15,000 and have been doubled at the maximum.
I gave an illustration in an earlier Debate of a rich man whose income was invested in gilt-edged securities, and showed what he paid in various forms of taxation. Will the House pardon me if I give three illustrations of men whose wealth is mainly in business, which is subject to Excess Profits Duty—one of those gentlemen whom my right hon. Friend is so anxious to get at? Assume that man has a quarter of his income coming from investments outside his business, yielding him 6 per cent. on his capital, and none of it subject to Excess Profits Duty. Assume that the other three-quarters comes from his business, the yield on his capital being 20 per cent. after allowing for Excess Profits Duty. Assume, too, that half the business profits that he is making are Excess Profits in the terms of the tax. His total gross income is £6,436; the Excess Profits Duty reduces it at once to £5,000, of which Income Tax and Super Tax will take 6s. 11d. in the £, leaving him less than £3,300, out of which he will have to make by annual payments any insurance which he wishes to create for payment of Death Duties on his death. If his gross income were £13,043, the Excess Profits Duty would reduce it at one swoop to £10,000, and Income Tax and Super Tax would take 8s. 8d. in the £ out of that £10,000, leaving him a net income of £5,700, against a gross income of £13,000. Again, out of that reduced sum he would have to make provision for Death Duties. If his gross income were £131,970, or say £132,000, the Excess Profits Duty would reduce it to £100,000. Income Tax and Super Tax would take 11s. 6d. in the £ of that sum, leaving him with a net income of £42,500 to go into his private account and to make provision for Death Duties. Only at the lowest point which I have mentioned does as much as 10s. in the £ remain to the taxpayer. At the highest point of the scale which I have given he retain only 32 per cent. of his
original gross income—about 6s. 5d. in the £ on what he has earned, and there is no allowance made in that circulation for Death Duties. If there were, it would reduce it to 5s. 7d. in the £. There is no country in the world which has attempted an effort comparable to ours, or in which the well-to-do are taxed so heavily.
I will not speak about the nations of the Continent, although it is pertinent to observe that, if they sometimes envy our quicker recovery, and think that because of it we ought to afford larger assistance to them, that quicker recovery is due to the immense sacrifices which we have borne, to the great height to which our taxation has been carried, and to the accuracy and the closeness with which the taxation is levied upon the citizens subject to it. Let me compare our position with that of America. The graduated scale of Income Tax, including Surtax, in the United States gives a smaller effective rate in the pound than in the United Kingdom on all incomes that do not exceed £72,000. Up to £72,000 our rate is higher than theirs. At £72,000 our rate becomes the same. If you omit to take count of the privileges enjoyed by certain War stocks in the United States, which have the privilege of exemption or partial exemption from Income Tax, the taxation in that country, on incomes exceeding £72,000, is imposed at a higher rate than in this country; but there are vast United States issues which are wholly or partially tax-free, and accordingly I think I am right in saying that the Income Tax as effectively levied is higher on incomes on this side than in the United States. Our Excess Profits Duty is more onerous. Death Duties in the United States rise gradually to 25 per cent. on the amount by which the value of the estate exceeds £2,000,000. The effective rate of Death Duties on an estate of £2,000,000 is barely 17 per cent., or less than half the rate which is chargeable in this country. If that be the result of the comparison with the United States of America, the House will know that my statement that there is no other country in which a comparable weight of taxation falls on the average of well-to-do and rich people is amply borne out by the facts. We have not made these sacrifices in vain. We are reaping the advantages of them, and those who are impatient and wish to see everything done in a moment, I would ask, at any rate, to take count
of what we have already accomplished. We saw the dollar exchange as low as 3.18. To-day it is in the neighbourhood of 3.90, and is showing strength, and has shown strength for some time. We have bought well over half our share of the Anglo-French loans already, and we have in New York, in sight or on the way, sufficient to cover the remainder of our half of the loan. The French have undertaken, of course, to provide for their half. We have enough to meet the remainder of our share, to meet all other market obligations of the Treasury in the United States up to the end of 1920, and to leave a satisfactory margin over. Of a debt of $100,000,000 to the Argentine, we have, although not technically, yet in substance, paid off $50,000,000 this year, and we have made arrangements for the redemption of the remainder in the course of the next two or three years. In the course of a month or so we shall pay back a loan of 20,000,000 yen contracted in Japan.
So much for the foreign loans. At home we have made provision for the redemption of £230,000,000 of debt this year, and we have made provision by taxes which should enable us to reduce debt by a further £300,000,000 next year without additional taxation. It is quite true that the floating debt remains at a very high figure, and it is true that, if you cannot raise a limited levy of £500,000,000 with safety on war wealth, you cannot rely, as an expedient for dealing with your floating debt, or your debt at all, on a general capital levy, which would have a far more disturbing effect and would create much greater insecurity for capital and credit. If you cannot deal with it by a direct levy on capital, whether on capital generally or on war wealth, neither is anything gained by calling a capital levy by another name, and levying it as a forced loan, or as a surcharge on income at a rate which nobody can afford to pay out of income, and which has to be paid out of capital resources. The result of the Committee's Report is to show that there is no short cut or royal road to the recovery of our position. Capital must be conserved for public and for business needs; speculation must be discouraged, and a better response must be given than has hitherto been made to the new Treasury issues and the Treasury Bills, but particularly to the new Treasury issues. The bank reserve is low, and the currency note
issue is higher than any of us would wish to see. To-morrow's Return will show Ways and Means advances largely increased in consequence of the payment of June dividends. That is all right if it is a purely temporary phenomenon, and in that case Ways and Means are being applied to the very purpose for which they were intended. The whole question is, will it be temporary? If it is more than temporary, it is a danger.
I say that there is no room for speculation, and that there is no room for rashness. Money is dear. Is it going to be dearer? The remedy is in the hands of the possessors of money. If they will conserve it, if they will follow a cautious policy, if they will not inflate credit or over-lend for trade, if they will encourage investors and themselves help to meet the public need, then we may avert the peril, and I hope we shall. What is my conclusion on the matter? It is one that I have often preached to the House, and I am afraid I can only repeat it. It is that the remedy for this situation is not to be sought by extraordinary and dangerous expedients; it is to be sought by a steady, continued course of effort over a series of years. The way may look long; it may be very rough. There may be times when, looking forward, we may be inclined to be discouraged. But when we feel like that, let us cast our eyes backward, let us measure the road we have traversed since this time a year ago, and, strong in the confidence given by the evidence of our own power to deal effectively with the situation, let us proceed to tackle the difficulties that are to come in the same spirit of courage and of endurance which has enabled us to overcome the difficulties of the past.

Sir WILLIAM PEARCE: I think the House recognises that the task which was laid upon the War Wealth Committee was so difficult and so complex that, unless under special circumstances, it is almost a matter of surprise that the situation was not dealt with by a committee of experts, rather than a committee of Members of this House. The Committee, perforce, was composed of all section of the House, and I think that the Report, with which I was glad to hear the Chancellor of the Exchequer express satisfaction, represents the greatest measure of common agreement that it was possible to arrive at in this com-
mittee. If we had attempted to proceed further, I think it would have become perfectly clear that, as the Chancellor has stated, the differences of opinion in the Committee were very decided, and it was not possible to get either a positive or a negative Report from them. I think the first good work the Committee did was to decide to sit in public. The Press were kind enough to take a good deal of notice of the proceedings, and the public, and I think the country at large, understand very much more about the difficulties and the pros and cons of the problem than they would have understood if the Committee had sat in private. I think that that decision met with general approval.
I should like to say a few words about some of the difficulties which presented themselves to the Committee. First, there was the difficulty, to which the Chancellor has referred, of distinguishing between fortunes made as a result of the War and fortunes made during the War. That was a difficulty inherent in the inquiry, and one which could not be surmounted. The Committee spent a great deal of time and ingenuity in trying to devise some plan which would get as nearly as possible to fortunes made out of the War. The scheme they suggested may have been open to great objection, but at the same time I think it did go a long way towards distinguishing between wealth possessed before the War and wealth made during the War. It provides, as is absolutely necessary, a very large allowance for savings. I remember one instance being brought to my notice of a very rich man, with an income of £100,000, who, by carefully saving everything possible, had put by a very large amount indeed during the War. He told me himself that by economy he saved over £50,000 a year right through the War, and invested that money in War Loan. It was pointed out, and I think with enormous force, that to suggest that that kind of saving should be subject to another tax was really a grave injustice. To accept that view forces anyone who attempts a practical application to make very large allowances on pre-War wealth. After a good deal of hesitation, the Committee adopted that view as being the nearest to giving some sort of rough justice, and I think it does. If you allow, as the Report suggests, an abatement of 100 per cent. up to £25,000, and in other cases not less than 30
per cent. of the pre-War wealth, before you begin to tax, it does cover any claim that will be made for ordinary saving, and does make some allowance for the decrease in the value of money. But still even then it is open to very grave objection. A millionaire before the War who during the War has added another £1,000,000, under the scale suggested would have £700,000 of his £2,000,000 subject to the purview of the tax, and the scale proposed to take 80 per cent. of that, that is, £560,000. It is obvious that the money has probably been invested in other industrial enterprises and to take such a large sum as that away from any individual might have a very considerable industrial effect and perhaps in ways which were not anticipated. On the other hand if this taxation is ever instituted, you cannot have an omelette without breaking eggs, and these heavy lumps of taxation, if you want to provide for £500,000,000, will have to be abstracted from the pockets of the more fortunate people whose wealth has accrued to them as their good fortune and not as their fault, and many persons have had riches thrust upon them. But none the less when the money has been reinvested and replaced, if you take such large quantities as that from one individual it is obvious that disturbance may be created perhaps of more consequence than one would imagine. If you go to a lower part of the scale, a man who has only made £10,000 during the War would be taxed under the scheme put forward by the Committee to the extent of about £2,000. He might say, "'This is very unjust; I only made £10,000, but a friend of mine made £25,000 and because he had £25,000 before the War he is not taxed at all." That again is open to grave attack, but after all I hold that the scheme as put forward by the Committee was a rough and rather successful attempt to equalise losses.
The problem altered a good deal during the sitting of the Committee. The first phase was with regard to the reduction of a floating debt. It was pointed out with great force that a floating debt of £1,200,000,000, which the Government could not be quite certain of renewing from time to time as bills became due, was a source of danger to the country. When the Committee examined the problem, to my surprise it was not presented as an attempt which ought to be made to get rid of the whole of the floating
debt at once, but the Treasury witnesses pointed out that if a larger revaluation than some £300,000,000 a year were made, the rapid fall in prices might be a great danger, and therefore instead of it being necessary to raise £1,000,000,000 or even £500,000,000 at once, probably £200,000,000 in one year would be quite sufficient to wipe off as much of the floating debt as it would be safe to do in that period of time. But when the Committee were half through, then came the Budget, with the enormous burden of the industrial taxes which the Chancellor of Exchequer felt it necessary to impose at this present time, and it came to me with irresistible force that trade and industry could not afford to have any additional burden put on to it beyond the taxes that the Government were proposing. Indeed, I think the House feels, and I think the right hon. Gentleman will know before the end of his Finance Bill, how great the fear of the country is that taxation at present cannot be supported without a serious check to the development and progress of the industrial position. This country has an unexampled opportunity to extend its business and its trade and its industrial prosperity, and it is a very serious question whether the country would be wise to support these enormous taxes on industry. At any rate, I feel strongly, and I think nearly everyone will agree, that anything in addition to the taxes indicated in the Budget would have been a disaster to the industrial and commercial position, and therefore the problem of the Committee, instead of becoming a question of additional taxation, became a question of alternative taxation.
Here I am not altogether satisfied that the commercial and the industrial classes of the country really appreciated what the alternative might be. It was indicated, but it was never stated in set terms, which I understand would have been the proposition of the Exchequer, that the Excess Profits Duty should this year be 40 per cent., and next year 20 per cent., and then disappear, and at the same time there would be no increased Corporation Tax. As a financial bargain—I am talking of it now simply as a financial bargain—that seems to me a very bad one for the Government and a very good one for industry, and I do not think commerce and industry really appreciated how good that bargain was, and I cannot help thinking that if that
had been put forward in set terms, industrial and commercial opinion might perhaps have been reconciled to further treaty with the Chancellor of Exchequer and a further inquiry. The right hon. Gentleman, I am quite sure, is right to this extent, that you cannot impose this tax against the opinion of the commercial and industrial classes. You cannot do that without having a panic. If industry had had a definite offer in set terms I think the war levy proposition might have received very much more consideration. After all, if a statement of that sort had been made, eliminating the Excess Profits Duty in two years, and undertaking not to increase the Corporation Tax, there is then a settled and fixed financial policy for the next two or three years, and I am quite sure that is one of the greatest advantages this House can give to trade and industry, and now that the Government has made its decision, I hope in no sense will the problem be re-opened, because a fixed and decided policy to my mind is one of the surest means of remedying the difficult financial position in which we are at present.
There is another reason why industry might have listened to these proposals if they had been made in set terms. I recognise the disadvantage of the Excess Profits Duty at present. My own experience, and I think it is confirmed by nearly everyone who has had to manage industry, is that it tends all the time to increase prices, and to my mind one of the chief aims of financial policy at present should be to do something to check increasing prices and to do nothing to add to them, and I feel that the Excess Profits Duty is open to that attack at present. The nation requires lower prices, but they will not be brought about so long as a heavy Excess Profits Duty remains. It seems to me that the two things almost follow one another. I do not think you will ever get a large fall in prices unless it is accompanied by a reduction in the Excess Profits Duty. If there is sufficient revenue from it to make it worth the while of the Government to maintain it, I believe it must follow that you will get very heavy prices and a very light fall on the present scale. Then, again, Excess Profits Duty, it must be quite manifest, not
only leads to extravagance but checks enterprise and checks the extension of business. I think, therefore, having looked at the problem carefully for the last two or three months simply as a question of how much industry was going to pay, if they had taken the war-wealth taxation as proposed in this Report in return for the elimination of the Excess Profits Duty, and the undertaking not to increase the Corporation Tax, it would have been a bad bargain for the Treasury and a good bargain for industry, and I understand the Chancellor of the Exchequer has come to the same opinion. But I do not want it to be taken that I am arguing in order to persuade the Government to alter their decision, because the greatest service they can render to industry is a settled financial policy, and I understand now that the Government will not change and it will be a settled financial policy. This is the greatest advantage the Government can give to industry so that industry may know where it is. After all, the salvation of the country does not depend upon taxation. It depends on the extension of work and industry, and I feel sure that a settled financial policy is one of the principal factors in bringing that about. Unless the nation at large realises that work is our only salvation we are in danger of losing in peace the great victory we have obtained in the War.

Lieut.-Commander HILTON YOUNG: I agree that the salvation of the country depends on its being restored to the path of complete commercial prosperity, but increased production can be of no avail if accompanied by a muddling and mistaken financial policy. We can work as hard as we like, but if the system of taxation is bad, we shall not enjoy the benefit of our labours. I was inclined at the beginning of the Debate to be very heartily in favour of the War levy proposition, subject to one condition, about which I hope to hear more in the course of the Debate. One could not but think it a just proposal. I recognise, of course, those imperfections which have been so carefully analysed by the Chancellor of the Exchequer—imperfections by which the levy would not have discriminated between increments of wealth immediately due to War conditions, and those not so immediately due. The Committee's proposal was substan-
tially just, because a margin was allowed for increments due to normal saving. It would have been impossible having regard to the absolutely widespread effect of war conditions throughout industry to say that any of the residue was not directly due to war conditions. I recognise fully the difficulties which were so accurately described by the right hon. Gentleman as regards the actual assessment of the tax, but nevertheless I was prepared to think that those difficulties might have been overcome by careful administration. The one condition which certainly was essential if it was to be worth while to impose this levy was that it should secure the amount desired for funding the floating debt within a reasonably short time. It was apparent that time was of the essence of the whole undertaking. The right hon. Gentleman has told us, speaking as I understand ex cathedra and with the accumulated authority and knowledge which is not available to those who are not in the inside of things, that idle war levy as proposed would not accumulate sums for the redemption of the floating debt worth having within the necessary time. When he summarised that matter by saying that it would actually put the Treasury in a worse position than the continuation of the Excess Profits Duty I confess that that is conclusive to my mind against the Committee's proposal as a practical measure of taxation.
That by no means disposes of the matter, and I should like with all deference to strike a note of interrogation. The war levy having gone, what are we going to do? We are all agreed that the position cannot go on as it is at the present time. We are all agreed that the floating debt cannot be allowed to remain unfunded. We are all agreed that the voluntary scheme of reservoir bonds is not at present a conspicuous success. The subscriptions to these bonds so far are insignificant What then are we going to do? On the whole I welcome the abandonment of the war levy because I believe it opens the way to what is an essential measure, the simpler and more inclusive scheme of a general levy on capital. Against that the arguments of the right hon. Gentleman did not in general apply. In general most of what he dealt with in regard to the war levy scheme was the difficulties of that specific scheme, and not attached to the
more general and the more simple scheme of a levy on capital. Against the levy on capital he advanced only one general argument. Of course he was not addressing himself to the general idea of a levy on capital, but as far as I could follow his line of argument he advances against that as the principal argument that if the levy on war wealth would create lack of confidence and an undesirable state of insecurity, a general capital levy would create even more It would be undesirable if that were so, but it need not be so if the capital-owning classes could be persuaded that the security of capital itself depends upon their consenting in the near future to some large and general measure of a levy on capital. If that were a condition of their security, then certainly the imposition of such a levy need cause no lack of confidence.
The reasons surely are well-known. I will not dwell upon the insurance argument, and I will not dwell upon the argument that it is necessary to throw something to the wolves. I do not think those are good arguments. This is not in reality a question between the rich and the poor. A capital levy would effect no substantial re-distribution of wealth. What the capital-owning classes would lose on the swings they would gain on the roundabouts. What they lost on capital they would gain in reduced taxation. What they are gaining, for instance, by the rejection of the war levy they are losing in the continuation of the very undesirable, the mischief working Excess Profits Duty.
It is not there that the importance of the capital levy lies. Its importance lies, unless I am much mistaken, in the urgent necessity for stabilising the whole economic system of the country and rendering the capital system safe on its own basis. How does that come about? It comes through the medium of prices. Prices are the practical point of application for all these considerations. What is going to bring the present system of capital down if it ever comes down? It will be this, that prices may rise so high as to cause a revolution, just as they have caused revolutions in foreign countries. What is the most urgent necessity, therefore, for the safety of capital is to prevent prices rising to that dangerous level. Why are prices so high
at the present time? The analysis is so well known that I should be ashamed to repeat it in detail to the House. We know that the cause of the rise of prices is the decrease of production due to the War and the increase in purchasing power owing to our methods of inflation in financing the War. We have inflated the purchasing power of the country by the manufacture of credit for the floating of Government loans, and especially by the creation of floating debt, Treasury bills, etc. That has been the cause of high prices, together with reduced production. If the rising prices are to stop rising and we are to induce a fall, what has to be done? We must invert the process by deflating credit, through the reduction of Government debt and the funding of the floating part of it. That is precisely what would, be directly effected by a capital levy. There is a tendency to speak and think of a capital levy as if it would effect the destruction of wealth. That is a very elementary error which will not of course be found within the walls of this House. So far from doing so, what is the actual nature of a capital levy? What would have been the effect of the war levy which we have rejected? The right hon. Gentleman would have taken £500,000,000 in the form of securities representing true wealth, and he would have written off against those securities, representing true wealth, £500,000,000 of Floating Debt, which does not represent true wealth, but only gas and air, only so much paper. It would have effected a total reduction of £500,000,000 in the Floating Debt, a reduction in purchasing power, and therefore a reduction in prices. That is the kind of benefit which is to be obtained from a levy on capital, and it is a benefit which is most essential for the maintenance of economic and industrial order. It is the only way in which we can break the vicious circle of rising prices and wages. Is that a benefit which capital can afford to disregard? If that is the only way to prevent prices and wages chasing each other towards social disorder, is that a benefit which capital can afford to disregard? There are other incidental benefits of no less importance to capital to be obtained by this break in the inflation of prices By the reduction of the structure of credit which we have built on our reserves, we
should enormously increase the reputation of the pound sterling, the paper pound, and that would have its effect upon the exchanges. It is the only thing that finally can stabilise the exchanges and restore the pound sterling to its former reputation. How would that work? It would work through prices. Low prices would discourage imports and encourage exports, thereby stabilising the exchange. Is that a benefit which capital can afford to disregard?
Finally, the benefit of a capital levy would be felt in its effect upon our national credit, and the consequent improvement in our position in any loan transaction which we may have to negotiate in the future. These are all essential changes in the present unsatisfactory position which are necessary to our future prosperity; rising prices are what we have to deal with in order to prevent the rake's progress towards social disruption. If that is so, surely those who have a stake in the country and who are interested in the maintenance of things on their present general basis will be well advised not to hesitate in taking the only course effectual to reduce prices.
6.0 P.M.
It is in the interests of capital itself, and to prevent disruption, that we should realise the practical importance of this question of a capital levy. But it is even more. It is essential in order to mitigate the hardships and to alleviate some of the injustices which have been imposed by our system of war finance upon those members of the great middle-class who live upon small fixed incomes. Those who have any affection for abstract justice and the equal distribution of the burdens of the War should find something to inspire their enthusiasm in this idea. Though the value of their incomes has been seriously reduced by our war finance, these unfortunate members of the middle class have no economic weapon by which they can restore the balance. All the great classes, those who live on salaries and pensions, soldiers and sailors, all those with a fixed income, have got no economic weapon with which they can defend themselves in the economic struggle for existence. The wage earner has the strike, industrial combination. The owner of property has his article, capital, to sell and to make his price for it. As against those this great section of
the middle classes is powerless, and in consequence has suffered. It has been made the victim of this indirect form of taxation by the inflation of credit and the raising of prices against it.
The only way to re-adjust the burden, to remove from those heavily laden shoulders this incredible burden, is by measures of taxation which will tend towards reduction of prices, and if there is anything in the argument which I have ventured to advance, the only way in which that can be done is by a capital levy. I believe most sincerely that the idea of deflation of credit, the redemption of debt and the funding of the floating loan being done simply out of revenue is no more than an idle dream. Under our present system of finance, expenditure rises to meet revenue. We put aside a sinking fund this year. The sinking fund will be raided next year by one section or other for some new scheme of expenditure. The talk about redemption of £300,000,000 next year and no more than a vision. Next year we shall have fresh expenditure coming along. Sinking funds have been raided ever since the word was first invented. They will be raided as long as they exist. The only way to break the circle is to make a special and a big effort. Therefore, I finish my observations as I began, with an interrogative, and I ask the Government what are they going to do?

Mr. STEPHEN WALSH: I am exceedingly glad to have been in the House listening to the speech of the hon. and gallant Member. He has struck a note which was required in this discussion. Up to the present it has seemed that the main idea was that the people most affected by the imposition of a war wealth levy, or even a general levy, upon capital were the people who had command of big organisations or possessed large fortunes. The truth is very far from that. The truth is as has been stated by the hon. and gallant Gentleman who has just spoken. This House finds itself in a very curious position after the work of the Committee. The Committee was set up about five months ago to inquire into the practicability of imposing a levy on fortunes made as a result of the War, not a levy on fortunes made before the War. Our terms
of reference were very limited and we made close inquiry into the case. I am in agreement with the hon. and gallant Member that the War was so all-pervading that it would be impossible to say that fortunes acquired during that period were not made largely as a result of the War, and I think that everybody will admit that while the nation was in the most extreme trial it would be morally right to take the increased fortunes that came to people during the hour of the nation's agony. Morally, therefore, the thing is right.
That it is desirable, I think, has also, been proved by the hon. and gallant Gentleman. Our present funded debt I suppose is £7,000,000,000. Our floating debt is well over £1,000,000,000. We talk about a sinking fund. We are prepared Lu set aside admit half per cent. of a sinking fund. I remember in the old days that seem so far away now, when we set aside £28,000,000 and there was a slight raid reducing the £28,000,000 to, £26,000,000, but the £26,000,000 was comparable to a funded debt of less than £700,000,000 or was, roughly speaking, about 4 per cent. of the debt, and we are now proposing to set aside about one-eighth of the proportion which we set aside before the War for sinking fund purposes.

Sir F. BANBURY: We never set aside £28,000,000. That amount was set aside for the service of the debt. Out of that £28,000,000 something like £24,000,000 was taken to pay interest. What was set aside to pay into the sinking fund was the difference between the two sums, which varied, perhaps, from £3,500,000 to £5,000,000.

Mr. WALSH: I think that the right hon. Gentleman is a little out in his facts, but I will not debate that. But surely out of a debt of £8,000,000,000 it cannot be held to be anything except a mere trifling with a payment of a debt of that kind, having regard to the future, to set aside one-half per cent. as a sinking fund. We cannot budget for many years ahead for less than £1,000,000,000 per year. The figure is positively staggering. There is no arithmetician, however competent, who can convey even faintly what it means. If, in the meantime, there are large bodies of men who have amassed huge fortunes, is it right or desirable that
those fortunes should be brought within the mesh of the National Exchequer, in order to reduce the huge debt under which any nation would be bound to stagger? I cannot imagine any nation holding out against the tremendous burden that such figures involve. It is morally right, we agree. It is desirable—everybody must agree—not to fleece those people, but to let them retain, if you like, every penny that they held before the War, and all that would result from the normal process of saving to which a good citizen directs himself. In those conditions one cannot see any hardship or any wrong committed by the State against the citizen. The point is, is it practicable? The best experts that the State contains say that it is practicable. By making large allowances, by doubling, in the case of the comparatively small men, the amount of the fortune they possessed before the War, and giving generous allowances in addition, and, in the case of the owners of very large fortunes, giving to them a considerable allowance before the process of levying commenced, you could so arrange it that it became practicable, and would bring in a fairly considerable sum. The Committee agreed unanimously that it was practicable. Therefore those three points are sustained. First, it is morally right. There was not a single witness who came before us who said that it would be an immoral thing to do. Every banker, trader and representative agreed as to that. They admitted that if it could be done without inflicting individual hardship or conveying a sense of individual wrong it was morally right to do it. Even the bankers admitted that. They admitted also that it was desirable if it could be done, but the dangers, they said, exceeded the advantages. Then the Committee agreed that it was practicable.
When we are talking on this kind of matter, we are very apt to let our minds be obsessed by the thought of the rich man. The calculation was that altogether there were not more than about 340,000 people who among them had amassed about £4,000,000,000—I will not say wealth£it is so very difficult to define it, but of credit or values, nominal or otherwise, there had been an increase in the wealth of the nation during the period from August, 1914, to June,
1919, of a little over £4,000,000,000. There were 340,000 people who accumulated that sum, but about a third of them were not fortunes that would come within the operation of the levy. In other words, £1,300,000,000 went out of the account, leaving £2,800,000,000. Altogether, in the earlier proposals about 200,000 people would be affected. I think the Chancellor of the Exchequer is quite right in saying that no nation pays so heavy a rate of taxation, right up to the possessors of very large incomes, but the comparatively poor must pay a very heavy rate of taxation, and it leaves me entirely cold when the Chancellor of the Exchequer draws our attention to the case of the rich man who pays so much and has only about £42,000 a year left. The man with £42,000 a year is not the sort of man that the nation ought to consider at this moment. Those whom we have to consider are the poor and the middle classes. It is they who really are the mainstay of the nation, the folks who actually do the work in the mine or in the mill, those who do brainwork at the desk and in the factories and are organising industry In a very real sense they are the people we ought to have in our mind, and not the people who, with one year's income alone, could endow themselves and their posterity for ever. There is a moral obligation upon the Government to make it clear to the vast masses of the people, the middle class and the working class, that this great burden of debt shall not be saddled upon them and theirs for generations to come. If we went out, and told the poor middle class man or woman with £300 or £400 a year that their Income Tax was still to be 6s., or possibly more, in the pound, they would wonder what proportion would be left of their income.

Mr. CHAMBERLAIN: The rate is not 6s. in the £.

Mr. WALSH: A good portion of it will be taxed at the rate of 6s. on the proposals made by the right hon. Gentleman. Suppose a man has an income of £500. He has an allowance of £150, but as to the remainder he is charged 3s. in the £ on some and 6s. in the £ on the rest. Those are the proposals of the present Budget. Is not that a far heavier burden than the burden about which the right hon. Gentleman speaks with so much eloquence—the burden of a man who, when he has paid Income Tax and Super-
tax, has still £42,000 a year left? We ought to bring our minds more within the region of reality. The people who bear the burden now are the vast masses of the working people, the brain workers, the clerks, the inventors, the men and women who day by day are doing their best in the constructive work of the nation. It is our duty to ease that burden. Do we not know of shipping, of textiles, of oil and of the thousand and one things which do not depend in any way upon the skill or brain or constructive enterprise of the men who have amassed large fortunes and who simply depend upon a scarcity value which creates those vast fortunes for them? Such thoughts are burning in the minds of hundreds of thousands outside this House—small men and poor women with their £6 or £7 a week, people who have been brought up in conditions of decency to which they had a right to look forward, but are now finding the burden greater than they can bear. What has to be considered is not so much what is taken from a fortune as what is left. £42,000 even at 5 per cent. is well over £40 a week. I have followed with very great care the whole progress of the public debt from the outbreak of the War. The right hon. Gentleman, or at least his predecessor, got many millions of money at 3½ per cent. We fought the War with varying degrees of success, but our credit was still good, and the next loan was floated at 4½ per cent. I do not know how many hundreds of millions additional money we then got. A further loan was floated at 5 per cent., and the then Chancellor of the Exchequer came forward and raised the value of Exchequer Bonds to 6 per cent. But another followed and got £1,000,000,000 at 5 per cent. From that time to this we have gone from bad to worse. In February last, when this Committee was set up, Treasury Bonds for five years were issued at 5¾ per cent. It is all very well for the Chancellor of the Exchequer to say that those who have money should put it into public securities and not speculate; that bankers should be more secretive and keep a tighter hold upon the funds. That is true, but at the very time when these Bonds were issued in February last up to this month there has been more money put into trading issues, apart from State issues, and with this month—that is, from January to June—it is probable that more money has been put into trading concerns,
although the Chancellor of the Exchequer is wanting money worse than ever, than was put in during the whole of 1919. That is where the State is not being properly treated. The State was wanting money in February last. The Bonds have been a very real failure—

Mr. CHAMBERLAIN: They were a very unexpected success.

Mr. WALSH: I wish I could join hands heartily with the Chancellor of the Exchequer in saying that the Bonds were successful.

Mr. CHAMBERLAIN: That really is so. The issue in February went extremely well.

Mr. WALSH: It is certainly dead against the idea of the public. if they went extremely well, how is it that we are compelled to resort to the sorry expedient of giving 7 per cent. now for similar Bonds? It is wholly unfair to people who, like myself and thousands more, did their best, because the needs of the nation were overwhelming. If that 5¾ per cent. Bond was an unexpected success as far back as February, how is it that we were compelled to issue a 7 per cent. or 6½ per cent. Bond?

Mr. CHAMBERLAIN: They go down to 5 per cent.

Mr. WALSH: Yes, in the last few years. It is rather late now, in view of the fact that the Committee was sitting during the whole period of five months, to urge upon the House this process that ought to have been urged at least six months earlier. Always with the process of the reduction of the debt the credit of the nation has increased. If we can reduce debt substantially by availing ourselves of money that could not have been obtained by anybody under normal conditions, availing ourselves of great fortunes due entirely to the scarcity values that the owners did nothing to create, we at once concurrently increase the credit of the nation. There is no robbery involved, and even the most pronounced antagonist of a War levy admits that it is morally right and desirable if it can be done. The Treasury experts, who pass their lives in the region of finance, agree that it is practicable, and I cannot myself understand
how the Chancellor has not adopted it. Everybody knows that the Chancellor is one of those men who would not be deflected from a decision by any body of people when once he felt convinced he was right. I do wish to bear my testimony, small though it may be, to the fact that the Chancellor never said a word in Committee to interfere with our work, but only to help it. He came to give the benefit of such advice and knowledge of the inner circumstances as only he could possess, and he in no way interfered with our findings. The morality and the overwhelming necessity and practicability being admitted, I am sorry he should have arrived at such a decision. I am certain that either by himself as Chancellor—and we would all like it to be in his time—or by someone else this House will be driven to the one great moral alternative of reducing the horrible burden of debt of this nation by taking from those who, although they have not immorally acquired it, because nobody wishes to charge them with immorality or unfairness, yet have acquired it in consequence of the War, and have something that they have no right to retain. Fortunes such as those ought to go to the benefit of the nation now and for the future.

Sir FREDERICK BANBURY: The hon. Gentleman who has just spoken has been an old friend of mine for a great many years, and I have always listened with interest to him. I am sure he believes every word he says, but I was extremely sorry to find that he had got hold of such very wrong notions upon this particular question. The hon. Gentleman says that everybody admits the practicability and desirability of a levy on war wealth. I deny that altogether, and, on the contrary, I should have said that nobody admits that it is either practicable or desirable. It is not practicable because you cannot distinguish between ordinarily acquired wealth and war wealth, and it is not desirable because it is not advisable at the present moment to take away capital which is required in order to carry on the industries of the country. The hon. Gentleman spoke a good deal about some suppositious case of someone who having paid his taxes had £42,000 per year which, he said, at 5 per cent. would give
him £40 per week. That is all very true; but is the hon. Gentleman going to lay down the proposition that a man is not to have more than a certain amount? That has got nothing to do with the question before the House. If he does lay down that proposition, how does he think anybody will invest money in industry or use his brains to promote and encourage industry? When a man puts capital into an undertaking and uses his brains to increase the value of that undertaking he hopes that what he saves will be available for himself and his children. If you say nobody is to have more than a certain amount all that will disappear, and the result will be ruin to the country. I should like to congratulate the Chancellor of the Exchequer upon one of the most excellent speeches I have ever heard him make, and I have heard him make a great many good ones. There is only one thing about which I am a little sorrowful, and that is that he did not make the speech three months ago instead of committing this inquiry to a Committee; because I am perfectly certain that the result of the raising of this question of a levy on capital, whether on war wealth or any other form of capital, has been to destroy confidence in the City and depress values, and to make it extremely difficult to obtain the money on loan which the nation will require. People in the City are extremely glad that the Government have arrived at this decision, but in the meantime while they have been waiting for it incalculable mischief has been done in having this matter discussed and even allowing people to think that there was a probability that this sort of thing might take place.
I am sorry the right hon. Gentleman who moved is not at the moment in his place, because I should like to say a word in answer to what he said about the action of a certain Committee which met last Thursday. The right hon. Gentleman said that the Government should be left free, and that Members ought not to put pressure on it on this question. I ask, what is the right hon. Gentleman doing to-day? Is he not endeavouring to put pressure on the Government to bring in a capital levy, and if he is right in doing so, surely it is right for other hon. Members to put pressure on them not to do so? The right hon. Gentleman insinuated that hon. Members
who were present at a meeting of that Committee were actuated by personal motives. If he were here, I should tell him that the five or six Members who signed the notice asking Members to attend would not, I think, suffer in the slightest degree if there had been a levy on capital. I was in the chair, and I am sorry to say that since 1906 my capital has diminished, and therefore I should not be affected in any kind of way. The only reason which induced me to take part in the meeting was the strong expression which was conveyed to me by all sections of the people who understand these matters in the City, by Chambers of Commerce, and, in fact, by anyone who had experience, as to what would result if such a step were taken. We had a very interesting theoretical speech from the hon. Member for Norwich (Lieut.-Commander Young). He began by saying that what was required was increased production. I thought that extremely sensible remark would be followed by other remarks in the same direction. The hon. and gallant Member then went into the realm of theory, and told us that in his opinion a capital levy would decrease prices. It would have no effect of that sort at all, but, on the contrary, it would increase prices, because the first thing it would do would be to diminish production. A manufacturer who was engaged in production and had expended so much on plant and so much on material might, say, be called upon to find a sum of £25,000. The first question he would have to answer, would be, "How am I going to get it," and it is extremely likely he would have to try and borrow the money, and he might find extremely difficult to get it, and when he did it would be at a high rate of interest. The hon. Gentleman (Mr. Walsh) talks about it being wrong to pay the high rate of interest which the Government are paying.

Mr. WALSH: I said that so much money had been allowed to go into trading speculations that the State was compelled to pay higher interest.

Sir F. BANBURY: If a number of people desire to buy a certain article, which in this case happens to be money, and if there is a small number who have that article, its value rises and that is what is taking place at present. The hon.
and gallant Gentleman, the Member for Norwich, said he did not believe in a war wealth levy, but that he believes in a capital levy which is far the worse of the two. There is something from the ordinary man's point of view to be said as to a man who has made money during the War that he ought not to have done so and that he has done so at the expense of the country. But that is the fault of the Government as one must not forget. If he has done so at the expense of the country and acquired a large sum of money, then since my capital has decreased I might feel why should we not have a little of it. That appeals to human nature, but it is not a sound business argument—quite the reverse. What we want to do is to encourage people to save and produce and to let people know when they have money that it will not be taken away from them. The hon. and gallant Gentleman said, "What is the alternative?" I think there are two alternatives. I agree that a floating debt of £1,100,000,000 is a danger to the State because eventually the State might have to pay eight or nine or ten per cent. for the renewal of the bills. It is, I think, very necessary that we should do something to fund the floating debt, and I think it is possible to do so, but it is not necessary to fund the whole of it. Treasury bills as long as they are kept within a reasonable amount are useful to the trading and commercial community. They serve a useful purpose, and provided they are kept within a limited amount ther are an advantage and not a disadvantage. The question then arises, What should you do to reduce the excessive amount which is in existence at the present moment? My right hon. Friend did make a proposal two or three months ago to ask for subscriptions for five to 15 year bonds. If I may say so, that was bound to be a failure from the very first.

Mr. CHAMBERLAIN: It was done on the best expert advice.

Sir F. BANBURY: I do not know whom my right hon. Friend consulted. I presume he would not call me a City expert, but I sat on this seat at that time, and I said to myself that it would be a failure. An hon. Member who was sitting next to me asked my opinion, and my reply was "It is many years since I was in the City, but in my time it would have been quite impossible to expect a loan of that sort
to meet with any success at all." As it happens, I went the next day into the City, and I asked a certain number of people who do know about these things, and they all agreed with me, and the result has proved that we were right. The reasons are these. The loan was too long for the money market. The money market likes something which has six, nine, or at the most twelve months to run. Anything with over a year to run the money market, or Lombard Street, does not like; but while it was too long for the money market it was too short for the investor, who does not like a security which is constantly maturing and which gives him a certain amount of trouble when he has to re-invest. He has to see his lawyer, or his banker, or his stockbroker, and he has to pay most of them for doing that which he does not like, and it takes up a considerable amount of his time, and he has got to decide and make up his mind whether or not he will renew or whether he will buy something else. He asks several of his friends about it, and they all give different replies, and the consequence is that the investor likes a long loan, while the money market likes a short loan. My right hon. Friend unfortunately produces a scheme which does not appeal to anybody, and I venture to say that if he will go into the discount market—I will give him privately the names of the people whom he ought to have asked—

Mr. CHAMBERLAIN: If my right hon. Friend is a prophet, will he prophesy for me what is the rate of interest at which I should offer a long-dated loan in order to make it a success?

Sir F. BANBURY: I will. I am coming to that. I am going to tell my right hon. Friend what I should do if I were in his place. I should do two things; first, I should issue a loan for about £700,000,000 or perhaps £800,000,000, and I should issue it in the form of a four and a half per cent. loan at 80, redeemable at par in 40 years by annual drawings of half per cent., the first drawing to commence next year.

Mr. CHAMBERLAIN: Would it be cheap?

Sir F. BANBURY: I have not worked it out in pen and ink, but I believe I am right in saying that £6 2s., including
redemption, is what it would yield, and that is about what the present Government securities yield at the present moment. If the right hon. Gentleman had done that a year ago, he would have got it at 4 per cent., and not 4½ per cent., at 80. He asked if it would be cheap, but you are not going to have things cheap, you are going to have things dear, and the longer you wait the more difficult it will be to fund this loan. Everybody knows you have got to fund it, and people are waiting until the matter is settled, and you will never get a revival of confidence or investment in Government securities as long as this matter is left doubtful and people do not know whether there is going to be a capital levy, or a forced loan, or what there is going to be.

Mr. CHAMBERLAIN: A year ago I did consult my right hon. Friend and offered the terms he suggested, and I did not get anything like what he said I should.

Sir F. BANBURY: That is exactly what the right hon. Gentleman did not do. I well remember that I advised him privately before he did bring out his loan as to what he should do, but he disregarded my advice. What I recommended was a 4 per cent. loan, at 80, redeemable at par in 40 years, by an annual sinking fund, by drawings, the first drawing to take place within a year, but my right hon. Friend did not do that. He brought out a 4 per cent. loan at 80 which was redeemable at 50 years, and not by drawings in the meantime, which ought to have been done. I hope the House will excuse me, but these are details which are perhaps only understandable by people whose business it has been to see how loans ought to be issued. That was my business for a great number of years, and I was always consulted on all the issues of loans by people in the City, and it is because I happen to have some knowledge of what does appeal to investors that I have ventured to address the House at some considerable length on this subject. That is the first thing I should do, and I believe it would be a success if it was accompanied by my second plan, which is economy. I have taken the trouble to compare the Civil Service Estimates of this year with those of 1910–11. In 1910–11 the Civil Service Estimates, including the
Irish Civil Service Estimates, amounted to £47,000,000. This year they amount to £493,000,000. We will start by presuming the £47,000,000 to be £50,000,000, and we will double it, on account of the rise in prices and the various increases in salaries which have been given, on the basis that what would have cost £50,000,000 in 1911 would now cost £100,000,000. I think that is a very excessive estimate, but I have taken it on that basis. I then find that in the Civil Service Estimates this year there is £123,000,000 included for war pensions, which, added to the £100,000,000, makes £223,000,000. I find that the Old Age Pensions have increased by £13,000,000. They are now £25,000,000, and my recollection is that in 1910–11 they were about £12,000,000. I add that £13,000,000 to the £223,000,000, and that makes £236,000,000. I put in another £14,000,000 for contingencies, and I come to £250,000,000. The Civil Service Estimates this year on the existing basis of taxation are in round figures £500,000,000, and I say they ought to be down to £250,000,000.

Mr. CHAMBERLAIN: My right hon. Friend has omitted war pensions.

Sir F. BANBURY: No, I have not. I took great pains to add the £123,000,000 for war pensions and the increased cost of old age pensions, and adding those and doubling the amount which was spent on the Civil Services in 1910–11, I arrive at £250,000,000, and in that I have given my right hon. Friend £14,000,000 to play with. The present estimate is £500,000,000. Take away from that £250,000,000, and you have £250,000,000 to devote to the service of debt£far and away a better plan than talking about capital levy, or war-time levy, or things of that sort. I venture to say that if the Government were to take their courage in both hands and cut down this enormous expenditure on the Civil Service Estimates, and if they were to devote the saving to the paying off of debt or the reduction of floating debt they would see at once, provided, of course, there was no question of a capital levy, a rise in all Government securities, and they would find investors coming to take whatever form of security was offered, provided it was offered in a proper form, for the investment of money to pay off floating debt. Do not forget this. The suggestions which I have ven-
tured to lay before the House are suggestions which require a certain amount of what I will call privation, for want of a better word, on the part of everybody. Everybody has got to deny themselves of something, and that is the first thing which we have all got to do. Unless we do that, unless some form of denial is instituted, what is going to happen? If you are going to get money in an easy way by a levy on capital and things of that sort, inevitably the result will be that there will be no saving, and money will be used for further extensions of schemes in the direction of social betterment, whether they be good or not. What the Government have got to make people understand is this. They have not got the money to go into all these new schemes, however good they may be, and until the public realise that we have got to make sacrifices and that the Government are going to set them the example, we shall never get our finances in a proper condition.

7.0 P.M.

Sir D. MACLEAN: We have listened to a very interesting and valuable speech from my right hon. Friend the Member for the City of London who has just sat down. He has addressed himself as a practical man to the suggestion of alternatives. I am no judge of the first of the alternatives which he suggested, but, with regard to the second, he knows without my emphasising it that I am in hearty agreement with what he said. I notice that his plea for national economy was received with hearty applause from all Members of the House present. If they would only transmute that enthusiasm into the practical work of this House in attending the dreary, dull routine of Estimates, and give some practical assistance to my right hon. Friend, and to others of us who are endeavouring, in the consideration of these Estimates, to force economy upon the Government, there would be much more weight in their applause, and much more practical effect than I fear is at all likely to happen. It is because I feel that the Government is hopeless in regard to the question of economy that I turn from that to the consideration of the main purpose of the Motion now before the House. I do not deny—it would be foolish to deny—that the question is one, not only of great complexity, but one which raises genuine doubts in the minds of men whose
patriotism and public services nobody can deny. It is a very cheap way of supporting a proposal of this kind by suggesting that anybody who opposes it is tainted with some personal interest; but those who followed the evidence given before the Committee, and have taken any interest at all in the public discussions both on the platform and in the Press, cannot come to a conclusion other than that there is a serious division in the minds of men who have no personal interests to serve.
I start with that assumption, but I look, as I am bound to look, at the Report of the Committee, and there are three points in the Report of the Committee which are, I think, of very great importance by way of support of the proposal. Shortly put, they are these: The Committee came to the conclusion that the valuation could be carried on in an effective and impartial manner; secondly, that the cost of administration and collection would be small; thirdly, that the burden of taxation would only be cast upon those individuals who could most justly be called upon to make the sacrifice, and that the tax would discriminate against those who had made exceptional profits out of the War. The Committee made a further and, in my humble judgment, a most important point. They went on to say:
If the financial position of the country is such that it becomes a matter of urgent necessity to raise a sum of the magnitude of £500,000,000 which cannot be obtained by other means, the objections raised against a tax of this character should not be allowed to stand in the way of the imposition of such a tax to meet the national emergency.
The immediate national emergency is the Floating Debt. Of course, the seven or eight thousand millions of debt is of vast importance, but the immediate thing to deal with is the Floating Debt. The simile which comes to my mind is that of a ship labouring in a storm, with a heavy cargo rolling about the deck and in the holds. This Floating Debt varies in its danger from week to week. It is added to, and subtracted from, according to the necessity of the Chancellor of the Exchequer. In his speech—and I am very glad to join in the tribute which has been paid to him; it was a speech, even for him, of exceptional clearness and lucidity and fairness—he pointed out that this week he had already to add to the debt.
He had to raise no less than £50,000,000 for the payment of the interest on the War Debt, and the result of that is, I am sure, that he has had to borrow at least half that through Ways and Means. That sort of thing cannot go on with any safety to our national finance, and the question is, what are we going to do, not a couple of years hence, but what are we going to do in the next six months or in the next year? My right hon. Friend the junior Member for the City of London (Sir F. Banbury) suggested floating a new Loan. I do not know, but, as far as I can judge, there seems to be a very great reluctance indeed, in these days, to take up loans under very much more favourable conditions than he suggests.
I think the only way to deal with this matter must be by some means of taxation. What is the alternative? The alternative in the mind of the Chancellor of the Exchequer is one which he naturally did not dwell upon in any detail, but such remarks, few though they were, as he made, were received with an obvious amount of disappointment, which was very natural. I believe the alternative to which we are driven for dealing with this question in the present position is the Excess Profits Duty. I may be hopelessly wrong, but I believe myself that, for dealing with this question of raising money for handling in some way or other this floating debt, the Excess Profits Duty, instead of being decreased, will have to be largely increased, and that is very likely to happen in the proposals of the Budget next year. The Chancellor of the Exchequer made a very fair offer. He said in effect, "Which will you have? If you accept this proposal, and it meets with a large measure of public acceptance, I will reduce the Excess Profits Duty, and it may be fairly taken that, if reduction begins, the vanishing point will be within sight within the next two or three years." The position before the Government is this: Instead of the Excess Profits Duty showing signs of diminution and final disappearance, it appears very much to me as if there will be an increase permanently. Let hon. Members face that position which I am venturing to put forward for consideration. Now is the time to think these things out. What other way can you raise the money? Of course, you can take another alternative, and have a super-super Income Tax, whereby
incomes of £10,000 and over will pay about 15s. to 16s. in the £. These are not wild speculations. The money has got to be raised to reduce this floating debt within something like manageable proportions. The argument put forward against this particular matter is that this will not work. Do the financial community believe that they prefer the Excess Profits Duty, with all its imperfections—a very mild term in which to describe it? I say again it is a bad tax, and I still think so, but the right hon. Gentleman has no alternative. He has got to get the money, and here is a machine which is raising the money, with all its difficulties and injustice. He agrees with every word I say about the arguments against the tax, but he has got to get his money, and this is the way that he is raising it. That is a matter for the commercial community very carefully and seriously to consider.
With regard to one or two other points in connection with this proposal. I do not think my right hon. Friend minimised the psychological side of the proposal. I am sure anybody who seriously thinks out the matter cannot do so. In his remarks on the Second Reading of the Finance Bill, he clearly shows how thoroughly seized he is of it. Dealing with the argument for the tax from that point of view, he says:
Apart from the cases of wealth not well gotten, the spectacle of the sudden rise of vast fortunes plays straight into the hands of those who are enemies of all capital in any form."—[OFFICIAL REPORT, 11th May, 1920, Col. 345, Vol. 129.]
Further, he goes on to say he believes that if a levy of this nature could be worked with no very grave injustice, it would add to the security of capital in general. I tell him then, without any hesitation at all, that the decision of the Government on this matter has, in my opinion, been greeted with great pleasure and delight in the minds of men who are enemies of all capital in any form. They believe that the Government have put into their armoury a fresh weapon of attack upon capital in any form, and from that point of view I profoundly regret the decision to which the Government have come. I think that it would have been better to take the risks. The effect upon the market has been very largely discounted already, because I think I am not very far out when I say it was the general ex-
pectation, and it certainly was mine, that the Government had made up their mind to try this tax. After the speech of my right hon. Friend, and the Report of the Committee, I was asked by a friend of mine some few weeks ago what I thought. "Well," I said, "personally I have very little doubt at all that the Government are going to carry out the proposal." I do not think that I am very far wrong in saying that to a material extent the effect of such a proposal has already been discounted, but I say again that the Government cannot overestimate the danger of the step which they have now taken. The moral sense of the community is all in favour of this being done, if it can be done. We all know that. In addition to that, you have a Report which says it can be done, and the reason that is given why it is not going to be tried is that, on balance, the disadvantages and the dangers outweigh the risk of taking this step.
I believe it would have been very much better to have taken that risk. An immense amount of public opinion would have been behind the Government, and that is a very important thing. I claim to be a business man. In my experience of business, over and over again the number of times in which the impossible has turned itself into a fact makes one discount very much these prophecies of disaster. Anyhow, the thing was worth trying. The argument with which the Chancellor practically concluded his speech—namely, a comparison between ourselves and the United States, and the amount of taxation which we are under in comparison with them—did not impress me in, the least. Their position is incomparably stronger than our own. There is no use our comparing ourselves with the nations of Europe at all in this matter—neither with France nor Italy, who, for reasons which they themselves think good, have not faced the facts of the situation, which are those of very considerable danger and difficulty. But the position of the United States is much better than our own. Who can doubt it? In their internal resources they are practically self-supporting. They have vast undeveloped wealth to which they can turn their minds and add to the national resources. The ratio of direct and indirect taxation contains no real test so far as they are concerned; for, until
recently, they have largely gone on raising revenue by indirect taxation. Their experiments by way of direct taxation, certainly so far as the income tax is concerned, are interesting, but to them quite modern and new. There is really no other country by which we can judge the test to ourselves. We must get through our own job in our own way. There is no other way of dealing with it. I am convinced, as I have said before, that on the ground of the psychological situation, on the ground of the inquiry, on the ground of practicability, on the ground that, to my mind, the only alternative is the Excess Profits Duty—which I think is undesirable—I think that the Government have made a mistake in this matter, and I and my friends have no alternative but to vote for the Motion.

Mr. MARRIOTT: My right hon. Friend who has just sat down has addressed himself to three points. He has addressed himself to those points with his usual directness of purpose. First of all there is the question of the diminution of the Floating Debt. I do not think that anybody in the House who listened to the exposition of the Chancellor of the Exchequer this afternoon can fail to be convinced by his arguments that as a means of reducing the Floating Debt the proposed levy on War capital would be absolutely ineffective. If I could be persuaded by my right hon. Friend opposite that this device, which he has fathered, would effect the purpose he has in view, I should be very strongly indeed inclined to support it. It is because I am convinced by what the Chancellor has told us, in his admirably lucid speech—one of the most lucid to which I have ever listened in this House and one of the most convincing, which, I venture to say with all deference and respect, will do more for the work of reconstruction in this country than half the ambitious social schemes of his colleagues—It is, I say, because I am entirely convinced by the arguments he used, and, I am afraid, entirely unconvinced by the arguments of my right hon. Friend opposite, that I take the position I do.
What is proposed? What is it suggested you could get out of this War wealth levy? The sum of £500,000,000. But in the first place when are you going
to get it? My right hon. Friend opposite said: "I want this money, not two years hence, but in the next six months." Did he listen to the argument of the Chancellor of the Exchequer? The right hon. Gentleman showed with absolute conclusiveness that whatever would happen in regard to this levy you could not get it in the next six months, or twelve months, and that, as a means of immediately wiping out the Floating Debt it would be hopelessly ineffective. My right hon. Friend opposite says there is the psychological question involved. All through the Debate, to which I have listened very closely this afternoon, there have been really two lines of argument. One has been the psychological or moral argument and the other has been the fiscal argument. The right hon. Gentleman who opened the Debate and my right hon. Friend the Member for Wigan—who addressed the House in a speech which most of us listened to with great pleasure—both dwelt at considerable length on the moral and psychological effect of imposing this levy on War wealth. What was their argument? It was that in the minds of a very large number of the people of this country there was a very strong feeling that you ought to get at the wealth of the man who had made money out of the national emergency. That feeling, it was said, strongly permeated the great masses of the people of this country. I have tried to approach this question, from the first moment that it was broached, not in the least from the point of view of the rich man; not in the least in the point of view of the large capitalist; but solely from the point of view of the well-being of the great masses of the community. That is the only point of view from which, in this House, we ought to condescend to examine this question. It should not be from the point of view of the interests of individuals, but from the point of view of the wealth of the nation as a whole. I have most deliberately come to this conclusion—and I am quite sure my hon. Friends opposite will not question my sincerity—that in the interests of the masses of the people, and in particular of those who labour with their hands, this proposal would be infinitely disadvantageous and mischievous.
I suppose I must in a few words attempt to justify that conclusion, at which
I have very deliberately arrived. I quite agree with what was said by my right hon. Friend opposite, that if you could impose special taxation upon fortunes made as the result of the national emergency, there is a very strong feeling that it ought to be done. But two questions arise. In the first place, can it be done, and, in the second, if it can be done can you get at the wealth of the ordinary War profiteer without inflicting more than a proportionate injury upon industry and trade as a whole? That, if I may respectfully submit it, is the point to which the House ought to address itself; not in a spirit of revenge on the War profiteer. The House should ask itself whether what my hon. Friends opposite describe as the psychological feeling—which I do not deny—can be satisfied without inflicting more than a proportionate injury upon industry and trade.
Let me address myself for a few moments to that question. The moment the Select Committee, of which I was not a member, began to investigate this question they were at once confronted by the considered opinion of the expert advisers of the Government that a levy on "'war-wealth" must be interpreted as a levy upon "war-time wealth." That was a point at which they arrived—that you could not discriminate between wealth which arose as the result of the War and wealth which merely arose during the progress of the War. The Memorandum which was submitted by the Board of Inland Revenue to the Committee made that point very clear indeed. They said that the ideal tax would, no doubt, seek to discriminate between the various classes of increases in wealth. For example, firstly, there would be wealth obtained by dishonest practices, exhorbitant charges, or evasion of direct taxation. Secondly, wealth obtained through the favourable situation of the particular class of property owner. Thirdly, increased wealth derived from increased earning power, and alteration of prices. Fourthly, increased wealth arising from exceptional efforts and exceptionally valuable services. Fifthly, increased wealth derived from normal savings out of ordinary business profits or other sources of income. Lastly, increase of wealth derived from exceptional savings made by special effort for the purposes of investment in war loan and the like.
Having enumerated these various classes of increase of wealth, and having said that an ideal tax would discriminate between them, what is the conclusion to which the expert advisers are driven? That "specific differentiation of this character is too difficult to be within the range of practical policy." If that is so, what is the value of the argument which has been elaborated by hon. and right hon. Gentlemen opposite in regard to the psychology of this question? Their moral or psychological argument is that the tax should be put on the man who has made wealth as a consequence of the War. But the expert advisers of the Government tell the Government, the Committee and the House of Commons that they cannot differentiate, so that that argument surely falls to the ground at the outset? The Committee, as the House knows, worked at the whole of this problem with immense patience and assiduity. What was the result? The net result was that the longer and the harder they worked the greater the complexities in which the problem appeared to be involved. We have in the Report a summary of the evidence which they received, and I will quote one or two sentences from that admirable summary. I will ask the House to observe the distinction which the Committee draws between the evidence they received from men versed in commerce and business and that obtained from economic theorists, one or two of whom have addressed us this afternoon. They say:
As regards the effect of the imposition of such a tax upon the individual taxpayer and on the country at large, your Committee found that: (a) the representatives of commercial and financial interests were convinced that the imposition of a tax on War-time wealth would have dire results. In their view such a tax would lead to a general shrinkage of credit, to a fall in the prices of securities, and a rise in the rate of interest .… One and all, they were of opinion that reduction of debt should be secured by taxation of current profits and current income and not by any levy on capital, however limited in extent.
That was the opinion of practical men versed in commerce and finance. The Committee go on to say:
(b) On the other hand, the economists who came before your Committee disagreed with many of these conclusions.
So that on the one hand you have the evidence of the practical men of business, and on the other hand the evidence of the
theoretical men. I confess that in this matter I am, on the whole, on the side of the men of experience and business, for whom my right hon. Friend the Member for the City of London (Sir F. Banbury) spoke with such admirable force this afternoon. I am of this opinion for precisely the reason advanced by some of my hon. Friends opposite. They have told us that the governing consideration of this question is not economic but psychological. I venture to substitute the word "human." You are dealing not with figures, but with men actuated by the ordinary motives of human action.
I want most strongly to urge upon the attention of the House, and in particular upon the attention of those who sit opposite, this point. I would ask them, with all the seriousness and earnestness I can command, what are the fundamentals of the industrial and commercial situation to-day? I do not believe that their answer will differ from mine. [Laughter.] I think I heard an hon. Member laugh, but perhaps he will consent to hear what I am going to say before he dismisses it with a sneer. I was about to say that the fundamentals of the commercial and industrial situation to-day are (1) abundant labour, adequately remunerated for adequate effort—the hon. Member opposite will not disagree with that; (2) in addition to abundant labour adequately remunerated, we want abundant capital, also adequately remunerated for an indispensable economic function; (3) we want confidence and security between those who can give labour and those who can provide capital, and we want security for the employment of both in the future.
Why do I oppose a capital levy in any shape or form? Not, as I have already said, from any selfish or personal point of view, but for these reasons. Firstly, that it will not effect that which it sets out to do. It will not adequately reduce the Floating Debt. Take the figures which have been given this afternoon. It is proposed to obtain £500,000,000 from this levy on war wealth. Supposing you get it. Would it really be more effective for the purpose we have in view than the taxation which is already existing? In the first place, you would take your £500,000,000 out of the pockets of those who have it, if you can get it. That sum at 5 per
cent. interest will produce £25,000,000 a year. You cannot have the £500,000,000 in the form of a levy on war wealth and also as a basis from which you derive Income Tax; and, again, as a basis for your Death Duties. It was shown by a simple calculation, in a letter which appeared in the financial columns of the "Morning Post," that actually, from the fiscal point of view, the Government would be no better off by the adoption of this levy on war wealth.
But there is another result. Confidence, I am sure, will be shaken to its foundations by any suggestion of that kind much more by realisation of this device. This is the point which most strongly appeals to anyone acquainted with the contemporary business situation. Capital which is indispensable to our economic recovery at the present time would in consequence of such a levy become both dearer and scarcer, because you would have taught people the unforgettable lesson that it does not pay to save. Is that the lesson which anybody in this House seriously wishes to inculcate and enforce to-day? Only yesterday there was delivered before the Bankers' Institute a very remarkable address by Mr. Edgar Cramond, and from that address I select this one sentence—
The dominant characteristic of international trade in the next ten years will be the tremendous world demand for capital, and our internal policy should be framed with due regard to world conditions.
That is a very authoritative opinion, and, in my view, a very sound one. I put it to hon. and right hon. Gentlemen opposite whether they have closely and seriously considered the problem we are discussing from that point of view. Credit is an exceedingly delicate instrument, and capital is a very shy bird. The Committee whose investigations we are discussing was appointed with a very limited reference, namely, "whether a tax on War-time increase of wealth is practicable, and, if so, what form should it take?" On that limited reference what was the conclusion at which they arrived? We have had it quoted in several quarters of the House this afternoon, and naturally people lay emphasis on different sections of their conclusion, but here is the gist of it:
They are of opinion that, although the administration of a tax of this character would involve many difficulties, yet those difficulties should not be insurmountable, and in its main features the scheme of the
Board of Inland Revenue as now amended is practicable in an administrative sense. As regards the question of practicability in its wider sense, of expediency and desirability your Committee feel that this question is one which can only be determined with regard to national and financial conditions in general.
Precisely; and it is from that point of view that I, at any rate, as a Member of this House, have desired to approach the consideration of this question. I am not going now to repeat the views which I have had many opportunities of giving expression to on the general question of a levy on capital, but in conclusion, I wish to express my own profound satisfaction with the decision at which the Government have arrived and which they have announced to the House. I am convinced that that announcement will be received, not only with a sigh of relief, but with immense satisfaction by the entire business community of this country. I do not think it is too much to say that ever since the Select Committee was appointed enterprise has been, by the mere fact of the appointment of that Committee, very seriously checked. No man in the financial or commercial world has during the last three months known where he stood, or where he was likely to stand six months hence. Therefore, I say that the decision of the Government will be received with immense satisfaction by the business community. I confess that when the Committee was first appointed I was very seriously doubtful as to the expediency of appointing it, but I admit that the Chancellor of the Exchequer has been so far justified in the result, in that a scheme which would have been fraught with the most mischievous results to the business community has been thoroughly and exhaustively explored and as a result of that examination has been turned down.

Mr. TREVELYAN THOMSON: The hon. Gentleman who has just spoken, in combating the psychological or moral argument which he attempted to pay some lip service to, suggested that as the Committee found it was impossible to discriminate between what can be called war wealth and war-time wealth, that therefore the moral argument broke down. I submit that practically the whole of the wealth above that made during the period of the War, and owing to the ramifications of the War, and its
effect on trade and all the wealth made during that period, is in fact war wealth. No one can carry on industry without consciously or unconsciously being affected by the abnormal conditions which prevailed during the War. I submit to the hon. Member for the University of Oxford (Mr. Marriott), that although you cannot possibly differentiate between what he calls war wealth and war-time wealth, it is really a distinction without a difference, and under the scale submitted by the Committee allowing for 100 per cent. increase up to a certain limit, you avoid all these peculiar hardships and injustice which so many of those who pay lip service to the theory wish to avoid. We have heard a great deal to-day about the City and Lombard Street, and its advice. I understand the Chancellor of the Exchequer has had the advantage of that advice in all the various measures he has taken since the beginning of the War in floating loans and carrying on the national finance. No doubt he has acted on that advice, although it may not always have been the advice of the right hon. Baronet the Member for the City of London (Sir F. Banbury). At any rate, he has had the advice of the City and its financiers, and I venture to suggest that the results of that advice are nothing to boast of. Has that advice resulted in such a tremendous success that those who gave it can claim to be infallible? I submit that the advice given by the financiers has proved to be wrong, time after time, and the appalling financial condition in which we now are is in some measure due to our having followed the advice which has thus been given. No one can contend that the present position is financially sound, and although the Government have acted on the best advice available from the City, it has not kept us out of the financial muddle in which we find ourselves to-day.

Sir F. BANBURY: The City is not responsible for the expenditure which is responsible for the present position.

Mr. THOMSON: You cannot run a war without expenditure. It is the policy of the raising of money inevitably due to war, and the big advances in the rates from 2½ per cent. up to 7 per cent., that I am criticising. We are told the Government have had the best advice of the City. In view of the results which we have in front of us, I suggested we
need not be too careful to follow too literally the advice which they give us on this particular occasion. I am sure the House is struck by the very careful and able contribution to the Debate of the hon. and gallant Member for Norwich (Lieut.-Commander Young), a contribution which the hon. Member for Oxford (Mr. Marriott), who spoke just now, disposed of by calling it mere theory. When one does not agree with the theory of things, but does agree with the matter, then I suggest it is sound common sense to accept the matter of the speech. All big business men are not opposed to a capital levy. The Chairman of Cammell, Laird and Co. is the head of a practical business firm, and he has spoken very strongly in favour of the principle of a capital levy. I submit that from the point of view of real production of wealth, apart from the flotation of companies, this Gentleman is as much an authority on this subject as anyone in the City. There are many business men who are in favour of this solution, as well as many who are against it, and therefore I suggest that the House itself should weigh the pros and cons as to the psychological and moral effects, which I admit may have greater influence in the country than many realise.
I am sure the country expected, after the speech of the Chancellor of the Exchequer on the Second Reading of the Finance Bill, that the finance of the Government would have been entirely different from what it now appears to be, and the House has a right to ask why there has been this change of opinion. The Chancellor of the Exchequer, on the Second Reading of the Finance Bill, appeared to be strongly in favour of a levy of this kind. We know that the Prime Minister, from the speech he made some little time ago at Manchester, was also in favour of this levy. We know further, although he has spoken with more caution, that the Lord Privy Seal looked favourably on the question of a capital levy. Here we have three responsible Members of the Government in favour of a policy which we are now told has been turned down. Why is it? Are there influences at work behind the scenes which are even stronger than the three principal Members of the Government? It is unfortunate if it is so. This House was once described outside—I thought wrongly at the time—as a capitalist
House of Commons. I am afraid if it goes forth that the influence of the Chancellor of the Exchequer, of the Prime Minister, and of the Lord Privy Seal, who have expressed themselves in favour of a levy, is to be overthrown in this way, there may be some ground for the criticism that other influences than those of mere principle are at work in a matter of this sort
Is this, after all, a business-like proposition? We all know that industrial concerns when they come to bad times, when they have to face a bad year's trading, and find themselves with a larger capital than they can conveniently carry, immediately adopt the business-like method of writing down their capital and reducing the paper value of their assets. Might not a parallel course be adopted by us as a nation? Could we not carry out the same principle, and get rid of some of our debt by means of a Capital Levy, thereby putting ourselves into a sound financial position? We could thus reduce our liabilities, and in some measure reduce the taxation we shall have to pay in the future. If you do not have a war levy you are bound to get an increasing amount of annual taxation in order to meet the obligations which will be a burden for all time. Our debt has been incurred on inflated values, and if you postpone repayment until money becomes normal again, you are incurring a burden much greater than there is any need to.
I wish to join with those who are protesting against the failure to take advantage of the opportunity now laid before the House to redeem pledges already given. At the time when we conscripted our sons we did not consider whether we were going to ruin businesses. We did not consider how we were ruining businesses when we took the man away from the single-man business. Surely, all the arguments and objections which have been offered to the raising of a war levy must have applied with infinitely more force to the action of conscription and taking the man power of the nation. Thereby we were ruining businesses; we were not only taking away the leading men, we were also taking the key men out of industry; we were taking away the men who were the sole support of the wife and family, and if we had no
consideration for them in the hour of the nation's jeopardy, when man power was so necessary, why should we now allow such objections to stand in the way of giving equal treatment and equal justice to those who have the capital which is required to wipe off the debt that has been incurred?
How can we face social legislation in the future? How can we go on piling taxation upon taxation unless we wipe off some of our debt by a war levy? The right hon. Baronet the Member for the City of London referred to the Civil Service Estimates and suggested that they should be reduced by one half. He referred to Pensions, but not to Education, or to the Health Services, or to Housing. It would be futile for this House to think it is going to economise in the future on education. To-day the Education Minister is cutting down grants made previously to the War to industrial communities, and he is thereby adding severely to the rates of those communities. We want more money for Education, for Health Services, and for Housing, and it is impossible to get it unless we are prepared to deal drastically with the Debt. I submit that the Chancellor of the Exchequer is rejecting a golden opportunity by turning down this proposal which the Committee have admitted is practicable, and he is not thereby enabling the country to stabilize its position, to reduce prices, and to get back to normal industrial methods.

Mr. CHAMBERLAIN: May I make an appeal to the House to come to an early decision? I understand that my appeal meets with the concurrence of the right hon. Gentleman who opened this Debate (Mr. Clynes), and I think it would be for the general convenience of the House that we should come to a decision before business is interrupted in the ordinary way at a quarter past eight.

Major BARNES: I have no intention of standing in the way of the appeal of the right hon. Gentleman, and I think I can say all I wish long before the period of interruption comes. I think the Debate we have had on this subject must be a great encouragement to those of us who believe in a capital levy. We have now got in this House a control of finance policy such as at one time met with favour only in the quarter of the House from
which I am speaking, and that advanced control is now being supported in many other quarters. It has taken the Government, as we learned last night, eighteen months or more to arrive at a sound Russian policy, and I do not think it will take much longer to induce them to arrive at a sound financial policy on this subject. There has been a good deal to encourage us during this afternoon's Debate. There has been an absence of heat on the part of those who object to our proposals. Years ago a proposal of this kind would have been met with cries of "confiscation," but to-day we are told that there is very little, if any, moral objection to it. There we have a considerable advance Then we have had support from un-expected quarters. The excellent speech of my hon. and gallant Friend the Member for Norwich indicates that this proposal is supported by a section of the community to which it has not hitherto appealed. There is reason therefore to hope that long before the next Budget comes this House will be prepared to adopt the principle of a levy on capital.
8.0 P.M.
I want to make some comments on what was said by the right hon. Baronet the Member for the City of London (Sir F. Banbury), who suggested that the way in which the situation could best be dealt with was by imposing privations on the community. He finds his golden age by turning back to the year 1910, and he suggests that the Civil Service Estimates today ought to be based on the Civil Service Estimates of that year, and that everything which has been passed since that time should be wiped out. What is the privation which is to be borne by the community as a result of getting rid of all the legislation passed between 1910 and the present time? The National Health Insurance Act is to go. There is to be a loss of the maternity benefit and the sanatorium benefit. That is the sort of privation to which the community in the opinion of the right hon. Baronet should be subjected. The Unemployment Act is to go with whatever advantage can be and is derived from that expenditure. These are the directions in which the right hon. Baronet looks for economy. I venture to say that, if there were a real desire to meet the situation, some compromise might be made between the other side of the House and this. We are not much in favour of a reduction of the Civil Service Esti-
mates, but we are in favour of a reduction on the Estimates for the Army and Navy. If right hon. Gentlemen opposite could see their way to meet this situation by consenting to a reduction of those Estimates, perhaps on this side there might be a disposition, at some time in the future, to suspend any increase in expenditure on social reform. If economy is to be talked about, it should be economy in both directions; but economy cannot meet this situation; it can only be met by further taxation. The alternative is the Excess Profits Duty, and the House is agreed that that is bad. We ask ourselves whether the Government ever seriously entertained this idea of a war levy, and why they should have gone to the trouble of setting up a Committee and of forcing the decision of that Committee. It is very well known that, if it had not been for the presence of the Chancellor of the Exchequer at its closing meetings, that Committee was not at all likely to have reported in favour of a war levy.

Mr. CHAMBERLAIN: The hon. and gallant Member has fallen into two errors, one of which I have already corrected. The Committee did not report in favour of the taxation of War wealth, and I exercised no sort of pressure whatever on the Committee.

Major BARNES: I am not suggesting for a moment that the right hon. Gentleman exercised any material and direct pressure, but I think he will agree that his presence at the Committee was bound to have its influence. I am not, however, dealing with that point. [HON. MEMBERS: "Divide, divide!"] I am not likely to be able to finish any more quickly if I am interrupted. It will not be necessary for me to speak for more

than two minutes longer—unless I am interrupted. We are assured that the right hon. Gentleman will have to go from his position. Perhaps I may be allowed to say that there is no Minister on the Treasury Bench who, in my opinion, fills his position with more distinction than he does, and it is not we who say he must go. The cry that he must go comes from the City. I would ask the right hon. Gentleman the Member for the City of London (Sir F. Banbury) to look after the City. The City is getting shaky on this question. I expended 6d. in the purchase of a leading organ in the City, and from it I found that there is a disposition in the City to turn round upon this subject; their views are changing. I learn from other sources that the bankers think it may really be good business—that the business which will follow, in the circulation that will pass when money goes through them to the Government and back from the Government to them, is going to be good business. From every point of view it seems to me that we on this side of the House have reason to be satisfied with this Debate, however the Motion may go—and at the present moment this House is not likely to vote for a levy on capital. If it were a question of a levy by capital, I have no doubt as to what the verdict would be.

Question put,
That this House, realising the serious effects upon trade and industry of the nation of the enormous financial burdens resulting from the War, regrets the decision of His Majesty's Government not to impose special taxation upon fortunes made as a result of the national emergency and declares that in order to meet the present financial burdens and assist in liquidating the National Debt further measures should be adopted for raising revenue from accumulated wealth.

The House divided: Ayes, 81; Noes, 244.

Division No. 129.]
AYES.
[8.5 p.m.


Barnes, Rt. Hon. G. (Glas., Gorbals)
Edwards, Major J. (Aberavon)
Kenworthy, Lieut.-Commander J. M.


Barnes, Major H. (Newcastle, E.)
Finney, Samuel
Kenyon, Barnet


Bell, James (Lancaster, Ormskirk)
Galbraith, Samuel
Lawson, John J.


Bell, Lieut.-Col. W. C. H. (Devizes)
Graham, D. M. (Lanark, Hamilton)
Lunn, William


Benn, Captain Wedgwood (Leith)
Graham, W. (Edinburgh, Central)
Maclean, Rt. Hn. Sir D. (Midlothian)


Bowerman, Rt. Hon. Charles W.
Grundy, T. W.
Malone, C. L. (Leyton, E.)


Brace, Rt. Hon. William
Guest, J. (York, W. R., Hemsworth)
Mills, John Edmund


Bramsdon, Sir Thomas
Hall, F. (York, W. R., Normanton)
Morgan, Major D. Watts


Breese, Major Charles E.
Hallas, Eldred
Murray, Dr. D. (Inverness & Ross)


Briant, Frank
Hancock, John George
Murray, John (Leeds, West)


Brown, James (Ayr and Bute)
Hartshorn, Vernon
Myers, Thomas


Cape, Thomas
Hayday, Arthur
Newbould, Alfred Ernest


Carter, W. (Nottingham, Mansfield)
Henderson, Major V. L. (Tradeston)
O'Grady, Captain James


Clynes, Rt. Hon. J. R.
Hirst, G. H.
Palmer, Charles Frederick (Wrekin)


Davies, A. (Lancaster, Clitheroe)
Hodge, Rt. Hon. John
Parkinson, John Allen (Wigan)


Davison, J. E. (Smethwick)
Hogge, James Myles
Preston, W. R.


Dawes, Commander
Jones, G. W. H. (Stoke Newington)
Raffan, Peter Wilson


Edwards, C. (Monmouth, Bedwellty)
Jones, Henry Haydn (Merioneth)
Rees, Capt. J. Tudor (Barnstaple)


Richardson, R. (Houghton-le-Spring)
Spoor, B. G.
Wedgwood, Colonel J. C.


Robertson, John
Stanton, Charles B.
White, Charles F. (Derby, Western)


Robinson, S. (Brecon and Radnor)
Swan, J. E.
Wignall, James


Rose, Frank H.
Thomas, Rt. Hon. James H. (Derby)
Wilson, Rt. Hon. J. W. (Stourbridge)


Royce, William Stapleton
Thomas, Brig.-Gen. Sir O. (Anglesey)
Wood, Major M. M. (Aberdeen, C.)


Short, Alfred (Wednesbury)
Thomson, T. (Middlesbrough, West)
Young, Lieut.-Com. E. H (Norwich)


Simm, M. T.
Thorne, G. R. (Wolverhampton, E.)
Young, Robert (Lancaster, Newton)


Sitch, Charles H.
Walsh, Stephen (Lancaster, Ince)



Smith, W. R. (Wellingborough)
Walton, J. (York, W. R., Don Valley)
TELLERS FOR THE AYES.—


Spencer, George A.
Ward, Col. L. (Kingston-upon-Hull)
Mr. Tyson Wilson and Mr. Neil Maclean.


NOES.


Agg-Gardner, Sir James Tynte
Ford, Patrick Johnston
McLaren, Hon. H. D. (Leicester)


Allen, Lieut.-Colonel William James
Forestier-Walker, L.
M'Lean, Lieut.-Col. Charles W. W.


Archdale, Edward Mervyn
Foxcroft, Captain Charles Talbot
Macleod, J. Mackintosh


Ashley, Colonel Wilfrid W.
Fraser, Major Sir Keith
Macmaster, Donald


Atkey, A. R.
Gange, E. Stanley
Manville, Edward


Baird, John Lawrence
Ganzoni, Captain Francis John C.
Marriott, John Arthur Ransome


Banbury, Rt. Hon. Sir Frederick G.
Gardiner, James
Middlebrook, Sir William


Barker, Major Robert H.
Gibbs, Colonel George Abraham
Mitchell, William Lane


Barnett, Major R. W.
Gilbert, James Daniel
Moles, Thomas


Barnston, Major Harry
Gilmour, Lieut-Colonel John
Molson, Major John Elsdale


Barrand, A. R.
Goff, Sir R. Park
Moreing, Captain Algernon H


Barrie, Charles Coupar
Grant, James A.
Morison, Thomas Brash


Barrie, Hugh Thom. (Lon'derry, N.)
Gray Major Ernest (Accrington)
Morrison, Hugh


Beauchamp, Sir Edward
Green, Albert (Derby)
Mount, William Arthur


Beckett, Hon. Gervase
Green, Joseph F. (Leicester, W.)
Murchison, C. K.


Bellairs, Commander Carlyon W.
Greer, Harry
Murray, Major William (Dumfries)


Benn, Com. Ian H. (Greenwich)
Gretton, Colonel John
Nall, Major Joseph


Bennett, Thomas Jewell
Hall, Lieut.-Col. Sir F. (Dulwich)
Neal, Arthur


Birchall, Major J. Dearman
Hall, Rr-Adml Sir W. (Liv'p'l, W.D'by)
Newman, Sir R. H. S. D. L. (Exeter)


Bird, Sir A. (Wolverhampton, West)
Hanna, George Boyle
Nicholl, Commander Sir Edward


Blades, Capt. Sir George Rowland
Harmsworth, C. B. (Bedford, Luton)
Nicholson, William G. (Petersfield)


Blair, Major Reginald
Harmsworth, Sir R. L. (Caithness)
Nield, Sir Herbert


Blake, Sir Francis Douglas
Harris, Sir Henry Percy
Norman, Major Rt. Hon. Sir Henry


Boles, Lieut.-Colonel D. F.
Haslam, Lewis
Norris, Colonel Sir Henry G.


Boscawen, Rt. Hon. Sir A. Griffith-
Henry, Denis S. (Londonderry, S.)
Norton-Griffiths, Lieut.-Col. Sir John


Bowyer, Captain G. E. W.
Herbert, Dennis (Hertford, Watford)
Oman, Charles William C.


Boyd-Carpenter, Major A.
Hickman, Lieut.-Colonel Thomas E.
O'Neill, Major Hon. Robert W. H.


Brassey, Major H. L. C.
Hilder, Lieut.-Colonel Frank
Palmer, Lieut.-Colonel G. L.


Bridgeman, William Clive
Hoare, Lieut.-Colonel Sir S. J. G.
Parker, James


Brittain, Sir Harry
Holbrook, Sir Arthur Richard
Peel, Lieut.-Col. R. F. (Woodbridge)


Britton, G. B.
Hood, Joseph
Pennefather, De Fonbianque


Brown, Captain D. C.
Hope, H. (Stirling & Cl'ckm'nn'n, W.)
Percy, Charles


Bruton, Sir James
Hope, James F. (Sheffield, Central)
Perkins, Walter Frank


Buchanan, Lieut.-Colonel A. L. H.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Perring, William George


Buckley, Lieut.-Colonel A.
Hope, J. D. (Berwick & Haddington)
Pinkham, Lieut.-Colonel Charles


Bull, Rt. Hon. Sir William James
Hopkins, John W. W.
Pollock, Sir Ernest M.


Campbell, J. D. G.
Hopkinson, A. (Lancaster, Mossley)
Pownall, Lieut.-Colonel Assheton


Carr, W. Theodore
Horne, Sir R. S. (Glasgow, Hillhead)
Pratt, John William


Cautley, Henry S.
Hotchkin, Captain Stafforo Vere
Pulley, Charles Thornton


Cayzer, Major Herbert Robin
Houston, Robert P.
Purchase, H. G.


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Howard, Major S. G.
Rae, H. Norman


Chadwick, R. Burton
Hume-Williams, Sir W. Ellis
Raeburn, Sir William H


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Hunter, General Sir A. (Lancaster)
Ratcliffe, Henry Butler


Child, Lieut.-Colonel Sir Hill
Hurst, Lieut.-Colonel Gerald B.
Raw, Lieutenant-Colonel N.


Clay, Lieut.-Colonel H. H. Spender
Inskip, Thomas Walker H.
Rawlinson, John Frederick Peel


Clough, Robert
Jackson, Lieut.-Colonel Hon. F. S.
Reid, D. D.


Coats, Sir Stuart
Jameson, J. Gordon
Remer, J. R.


Cobb, Sir Cyril
Jephcott, A. R.
Remnant, Colonel Sir James F.


Cohen, Major J. Brunel
Jesson, C.
Richardson, Alexander (Gravesend)


Colfox, Major Wm. Phillips
Jodrell, Neville Paul
Rogers, Sir Hallewell


Cooper, Sir Richard Ashmole
Johnson, L. S.
Roundell, Colonel R. F.


Coote, Colin Reith (Isle of Ely)
Johnstone, Joseph
Royden, Sir Thomas


Cope, Major Wm.
Jones, Sir Edgar R. (Merthyr Tydvil)
Royds, Lieut.-Colonel Edmund


Cory, Sir J. H. (Cardiff, South)
Jones, Sir Evan (Pembroke)
Sassoon, Sir Philip Albert Gustave D.


Craig, Colonel Sir J. (Down, Mid.)
Kelly, Major Fred (Rotherham)
Shaw, William T. (Forfar)


Curzon, Commander Viscount
Kidd, James
Shortt, Rt. Hon. E. (N'castle-on-T.)


Dalziel, Sir D. (Lambeth, Brixton)
Kinloch-Cooke, Sir Clement
Smith, Harold (Warrington)


Davidson, Major-General Sir J. H.
Knight, Major E. A. (Kidderminster)
Smithers, Sir Alfred W.


Davies, Sir Joseph (Chester, Crewe)
Knights, Capt. H. N. (C'berwell, N.)
Stanley, Major H. G. (Preston)


Davies, Thomas (Cirencester)
Lane-Fox, G. R.
Starkey, Captain John R.


Davison, Sir W. H. (Kensington, S.)
Larmor, Sir Joseph
Steel, Major S. Strang


Dean, Lieut.-Commander P. T.
Law, Alfred J. (Rochdale)
Stephenson, Colonel H. K.


Dewhurst, Lieut.-Commander Harry
Law, Rt. Hon. A. B. (Glasgow, C.)
Stewart, Gershom


Dockrell, Sir Maurice
Lister, Sir R. Ashton
Strauss, Edward Anthony


Doyle, N. Grattan
Lloyd, George Butler
Sturrock, J. Leng


Elliot, Capt. Walter E. (Lanark)
Lloyd-Greame, Major Sir P.
Talbot, G. A. (Hemel Hempstead)


Elveden, Viscount
Lorden, John William
Terrell, Captain R. (Oxford, Henley)


Falcon, Captain Michael
Lort-Williams, J.
Thomas, Sir Robert J. (Wrexham)


Fell, Sir Arthur
Lyle, C. E. Leonard
Thomson, F. C. (Aberdeen, South)


FitzRoy, Captain Hon. E. A.
Lynn, R. J.
Thomas, Sir W. Mitchell-(Maryhill)


Flannery, Sir James Fortescue
M'Donald, Dr. Bouverie F. P.
Thorpe, Captain John Henry



Mackinder, Sir H. J. (Camlachie)
Tickler, Thomas George




Townley, Maximilian G.
White, Lieut.-Col. G. D. (Southport)
Wood, Major S. Hill- (High Peak)


Tryon, Major George Clement
Whitla, Sir William
Woolcock, William James U.


Turton, E. R.
Willey, Lieut.-Colonel F. V.
Worsfold, Dr. T. Cato


Vickers, Douglas
Williams, Lt.-Com. C. (Tavistock)
Worthington-Evans, Rt. Hon. Sir L.


Waddington, R.
Williams, Col. Sir R. (Dorset, W.)
Yate, Colonel Charles Edward


Wallace, J.
Willoughby, Lieut.-Col. Hon. Claud
Young, Sir Frederick W. (Swindon)


Ward-Jackson, Major C. L.
Wilson, Daniel M. (Down, West)



Warren, Lieut.-Col. Sir Alfred H.
Wilson-Fox, Henry
TELLERS FOR THE NOES.—


Watson, Captain John Bertrand
Winterton, Major Earl
Mr. Dudley Ward and Commander Eyres-Monsell.


Weston, Colonel John W.
Wood, Hon. Edward F. L. (Ripon)



Wheler, Lieut.-Colonel C. H.
Wood, Sir J. (Stalybridge & Hyde)



Question put, and agreed to.

Orders of the Day — GAS REGULATION BILL.

Order for Second Reading read.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Bridgeman): I beg to move, "That the Bill be now read a Second time."
I am afraid I have not much time—

Mr. HOGGE: If any other business was taken, the understanding was that we were to go on with the Agriculture Bill.

Mr. BRIDGEMAN: No, no.

Mr. HOGGE: Yes, we were to go on with it and continue it to-morrow. Then follow with the Gas Regulation Bill.

It being a Quarter past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed without Question put.

PRIVATE BUSINESS.

EDINBURGH BOUNDARIES EXTENSION AND TRAMWAYS BILL [Lords]—(By Order).

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Captain W. BENN: I was expecting the promoters of the Bill to have favoured the House with some explanation in order that there should be a case to be answered. Was my hon. Friend going to speak?

Mr. A. SHAW: Yes.

Mr. SPEAKER: The hon. and gallant Gentleman will have exhausted his right to speak.

Captain BENN: In that case I shall be bound to trouble the House with remarks opposing a Bill which has not been explained.

Mr. SPEAKER: The Bill is brought in from the Lords. It has passed the Lords and come down. If there are any objections to be raised now is the time to raise objections. It is not usual to introduce with a speech a private Bill which has come from the other House.

Captain BENN: In that case I shall be bound, as I should have exhausted my right to speak, to adumbrate what I imagine to be the case which my hon. Friend (Mr. Graham) proposes to make in order to meet it. But certainly I should have preferred to hear what he had to say before I attempted to answer him. However, if the order of debate is to be so I will fall in with it and attempt to answer what I imagine his case is going to be. This is a Bill which proposes to extend the boundaries of the City of Edinburgh in order to take in a large and important commercial borough which has enjoyed a measure of independence for a hundred years, and the character of which is totally different from the city which is desirous of embracing it. The onus of proof lies on the promoters of the Bill. It is not to be assumed naturally that because one area is contiguous to another therefore the best interests of good government are served by joining them together under one common administration. Therefore I shall expect the hon. Member who I understand is in charge of the interests of the Bill to explain on what grounds it is that he is making this proposal that the administration of Leith should disappear and that the City of Edinburgh should take over the charge of the administration of the new area. It is perfectly clear that the Bill is not moved because it is alleged that there is any inefficiency in the administration of the borough which I have the honour to represent. Mr. Gladstone was Member for the borough at one time and he came of Leith stock. His father was born within the confines of the borough.

Mr. HOGGE: He never sat for it.

Captain BENN: He was elected for Leith.

Mr. HOGGE: He elected to sit for Edinburgh.

Captain BENN: He was elected and his father, Sir John Gladstone, was born in Leith. It is not alleged by the promoters—I gather my hon. Friend does not base his case on it—that Leith is inefficient. He could not, because the witnesses called by his own party in the investigation which has taken place into this case have admitted that it has been a well-managed borough. Bailie Cameron, one of the bailies of Edinburgh, in his evidence said:
It has been a well-managed borough, and to-day Leith is an up-to-date borough.
The late Lord Provost of Edinburgh, Sir John Lorne McLeod, who, I believe, was one of the most active promoters of the Bill, was asked, "Is Leith an efficiently administered borough?" to which his answer was, "Yes." As an educational area and in the matter of public health and in the matter of business Leith is an efficiently administered burgh. The general evidence from the mouths of the representatives of Edinburgh I have already given.
On the educational side I need only point out that this house only a year ago had to decide whether or not the burgh of Leith should be made a separate educational area, and it was decided that it should be. It was decided that Edinburgh, Glasgow, Aberdeen, Dundee and Leith should be the five burghs in Scotland that were to be made separate educational areas. Very properly so, for the educational task of Leith is comparable with, indeed it is a bigger task than that of 22 of the 33 counties in the whole Kingdom. It may be asked, is the work efficiently done? The answer is that it is done at a less charge per head, although Leith has a very much larger child population than the neighbouring city. As regards results, in the last seven years Leith has doubled the number of children which it has sent to the higher grade schools. This is some evidence of the efficiency of the educational work which is done there. It may be asked, what about health? No doubt, my hon. Friend will have a great deal to tell us, in explaining the provisions of this Bill, about the desirability of enlarging the areas—I presume indefinitely, because I
do not know what limits he proposes to set on the areas—in the interests of public health. In theory, the hon. Gentleman may make a wonderful case, but in practice we must ask what are the actual results, because the efficiency of the health administration is susceptible to tests. It must be tested by statistics, and judged by statistics some very surprising results are seen.
The birth rate of Leith is considerably higher than the birth rate in Edinburgh, namely, 23.4 as against 15.8. If you consider the mortality rate of infants under one year, which is a very good figure to take as a test of the sanitary conditions of a town, we find very remarkable results For Edinburgh the number of deaths is 124 per thousand, while the comparable figure in Leith is 107. These figures certainly do not suggest that a burgh where this excellent standard of health is maintained, and it is a standard which is admitted all over Scotland, is likely to gain in public health by amalgamating with a city where the comparable figures are not anything like so good. In the matter of housing, those who know the City of Edinburgh and the town of Leith, and know how crowded the districts are, might expect to find the conditions of overcrowding worse in Leith than in Edinburgh, but the figures given by the Edinburgh witnesses before the inquiry show that whereas in Leith 8.2 per cent. of the tenements were one room tenements, in Edinburgh 9.5 is the comparable figure. So that in regard to the general efficiency of the burgh, in regard to its educational administration, and in regard to the important matter of public health, Leith certainly has no reason to fear inquiry, and the state of affairs there provides absolutely no ground whatever for any approach to this House by the City of Edinburgh to extinguish the independence of this ancient burgh.
We live in days when finance is a very important question, and this House will expect public bodies to set an example of thrift and in the careful husbanding of their resources. Judged on these grounds Leith is a real shining example of efficient municipal management. If the Chancellor of the Exchequer were here he would be glad to know that Leith will be able to raise this year £200,000 for housing at 5 per cent., money raised locally, which certainly shows considerable confidence on the part of those who live in the burgh
in the administration under which the burgh prospers. The debt charges of Leith, which are a very good test, compared with Edinburgh, are very favourable. It is not my business, and it would be very distasteful to criticise adversely or to attack Edinburgh in any way which is not absolutely necessary. I am only dealing with the proposals she is putting before the House, and if we make this comparison in regard to debt charge we find that the position of Leith is a very strong one, as one would expect who knows the personnel of the administration there and the strong spirit of patriotism which animates the citizens, to which I can testify as one who has the privilege of being its representative, although a stranger and a political refugee. If you take the capital directly and solely chargeable to the rates, Leith has a capital sum of 12s. 4d. per head as against a capital sum of £3 2s. 2d. per head in Edinburgh. I am speaking of the capital debt directly chargeable to the rates. The total local debt which includes every debt not directly and solely chargeable to the rates is in Leith £2 1s. 4d. per head as against £4 17s. per head in Edinburgh. When a burgh has managed its affairs, not carelessly and in a slip-shod way, but in such a way as to produce a condition that whether you look at education or housing or health it has administered its affairs with thrift, prudence, and in an extremely praiseworthy manner, it seems a very hard thing that the neighbouring city should come to this House and ask that the independence of that burgh should be extinguished. The proposal has been made before. It was made 24 years ago. When it was made before, Edinburgh put forward the plea that the loan charges for unremunerative undertakings were high in Leith compared with Edinburgh. The charges were then 5d. in Leith as compared with 2d. or 2¼d. in Edinburgh. That was in 1896. Leither was given her independence or, rather, it was restored or renewed. Renewed is the proper word.

Mr. HOGGE: indicated dissent.

Captain BENN: My hon. Friend is splitting hairs. He will have an opportunity of saying what he wishes to say later. He represents a burgh which pleaded to be left out of the Bill, and now, when that burgh has been left out of the Bill, I understand my hon. Friend is
supporting the Bill. I did not see that he was supporting it earlier. In the previous amalgamation proposals, where as Leith had a charge for unremunerative undertakings of 5d., compared with Edinburgh's 2d., she has, since she had her independence continued, reduced the charge to 3d., while the Edinburgh charge has risen to 8d. That is an example, if ever there was an example, of careful management of local finances. That deals with the first point I desire to make, which is that this Bill cannot be based in any sense on the alleged deficiency of administration, either in the matter of services or in the matter of finance. I am at a disadvantage, because I do not know what my hon. Friend the Member for Central Edinburgh is going to say, and I shall not have any opportunity of replying when he has said it. I imagine that what he is going to say is something of this kind. He will say, "Look at the map. These districts are contiguous." He will say that the City of Edinburgh envelops the town of Leith on every side, and that, if you look at the map, you will see how extremely unreasonable it is that Leith should stand out for separate administration. The map is, I take it, the great argument, because in a statemenlt on behalf of the City of Edinburgh there is a map as supplement thereto on which the whole case is based.
It is true that on the land side the city of Edinburgh envelops the town of Leith, because Edinburgh with great foresight has come previously, and piece by piece acquired the land surrounding Leith. It may have been a very proper thing to do, but having done so it failed to develop the land which surrounds Leith, and it now produces a map which shows Leith entirely enveloped by Edinburgh, and claims on that basis, having failed to develop the land which it has got, to acquire this thriving and independent borough. Then my hon. Friend will say that the whole boundary of Leith is contiguous to the boundary of Edinburgh except on the sea-side, but he will omit to mention that the sea boundary of Leith is four miles long, and that the land boundary is four miles also. He might as well say that England entirely envelops Scotland except on the sea-side, because the land boundaries are contiguous. Then I take it that my hon. Friend will say, "It is very inconvenient that the electricity supply for the two districts should be
divided. Why not have a joint supply?" and he may say that the charge for electricity in Leith is slightly higher than the charge for electricity in Edinburgh, but I hope he will go on to point out that neither Leith nor Edinburgh is to be the final unit for supplying electricity, but that under the Government proposals perhaps the whole South of Scotland will be made one area. Whether this Bill passes or whether, as I think much more likely, it does not, will not in the least affect the supply of electricity for these two districts, and as regards the slight additional charge I hope he will go on to explain that it is due to our superior thrift, as we are making a steady series of payments to redeem the capital outlay, and £3,000 was redeemed this year, while Edinburgh is spreading its repayments over a long series of years, which was extended by five years only a short time ago.
Perhaps my hon. Friend in pursuing his case for the Bill will refer to what is called the Pillory muddle. Hon. Members all know that the Pillory was the manor of the Balfours, the family referred to in Stevenson's book, and they will be interested to know that the present owners of the Manor of Pillory are opposing bitterly the proposals of Edinburgh. What is called the Pillory muddle, which will be advanced as one of the reasons for amalgamation, is that the trams come from Pillory to Edinburgh by the cable system, and from Leith by the electric system, and the result is that those who desire to make the through journey have to change cars at Pillory. So far from this being an argument in support of amalgamation, it is one of the most striking examples of the evils of amalgamation. I understand that running powers between the two districts are not only easily acquired, but that they can be compulsorily enforced under the Ministry of Transport Act of last year. But in 1896, when the last attempt was made by Edinburgh to annex Leith, this tramway was one of the points which were put forward, and if we had been defeated in 1896 we should have been committed to the very cable system which is now such a colossal failure in Edinburgh. The superior civic foresight of the citizens of Leith at least saved us from this, and I hope that when Edinburgh electrifies its trams the difficulty of the Pillory muddle will disappear by the through running of cars exactly in the same way as the
L.C.C. runs cars to East and West Ham and into Middlesex and the other counties adjoining London.
Another point which I conceive will be invoked in support of the Bill is that the boundary running through houses does cause considerable inconvenience. In theory there is no harm in a boundary dividing. That is what boundaries exist for. Every boundary is compelled to go through some place. In equatorial forests there may be chiefs whose families are divided by the equator, so that some are in the northern hemisphere and some are in the southern hemisphere. In the late War I have seen camps in which men slept with their heads in Asia and their feet in Africa, and I never heard that advanced as a reason for amalgamating Asia and Africa. There is no point in this boundary argument unless it be based on the idea that it is a danger to public health. There is a point of substance in that, but instead of indulging in vague generalities and a priori arguments, a better thing is to examine the systems of the two bodies concerned. That I have done, and I hope that I have shown effectively that Leith, so far from being placed under the serious disadvantages which my hon. Friend will no doubt refer to in connection with boundaries, is in fact a model to burghs even in Scotland. I do not know what the hon. Gentleman will say about other burghs, but it is possible he may say there are many precedents for this proposal. I do not think he will find a single precedent for this proposal. He will find amalgamation of cities, with their dormitory districts adjoining. That of Dundee and Broughty Ferry is a case in point. People work in the City of Dundee and sleep in Broughty Ferry, and it is very proper that the dormitory should be brought in to share in the burdens of the city. But that is not a case in pari matéria with the annexation of an independent town by a large city. In the case of Glasgow and Partick and Govan there was a deal. Hon. Members for both these divisions are supporting me in my resistance. Then take Rutherglen, which opposed and succeeded in its opposition. So I challenge my hon. Friend to produce a case which is on all fours with the present proposal. There is no case. It is
because this case is without precedent that this House has resolutely refused in the past to grant the extension of the independence of the burgh.
Perhaps my hon. Friend will say that Leith is the port of Edinburgh. I deny that. Leith is a seaport adjacent to Edinburgh. Two-thirds of the goods which enter the port of Leith have nothing whatever to do with Edinburgh and do not go to Edinburgh. Leith is the East Coast port of Scotland. Some figures were compiled twelve years ago by the Dock Commission and they showed quite clearly that the argument that Leith is the port of Edinburgh is a complete misstatement. The figures show that 68 per cent. of the goods that enter Leith go from it by rail, that 14 per cent. go by water, and that 18 per cent. are distributed locally, of which about two-thirds are distributed in Leith itself. Edinburgh in not an industrial centre in the same sense as Leith. Edinburgh is not primarily industrial at all. Edinburgh is the great capital of Scotland. As a former Lord Provost said, it is the centre of education, of banking, insurance, finance, medicine, surgery, and law, and he added: "It has important industries, but it is an industrial centre almost in spite of itself." I think that is a very fair statement of the case. The whole nature and spirit of Edinburgh is not industrial. On the other hand, the whole breath of life of Leith is industrial. What is going to be the fate of a comparatively small commercial centre which depends upon business management, and is run by business men, if it is to be absorbed by a great city with enormous tracts of agricultural land, and all the interests of the sciences and the arts as the prime interest of the city, and not commerce at all? For the total number of premises there are twice as many business premises in Leith as in Edinburgh—thirty to sixteen—and in working men's dwellings the number is again as two to one.
I suppose that the hon. Member who will attempt to make some case for this Bill will say that my sentiments do me great credit, but this is a matter of the natural expansion of a city as against purely local sentiment, which, however creditable and honourable, should not stand in the way of the growth of a great municipality. I suggest that the
geographical position of this town has stamped it with a character utterly different from that of the adjacent city. Leith has always been the open door of Scotland. It has been the fulcrum for all foreign attacks on Scotland. In the 16th century it was the centre from which the French interest was operated against the Scotch. If hon. Members think that this is simply a Bill for extending the boundaries of a great city in order to take in the overflow of that city, they make a great mistake. It is nothing of the kind. It is a Bill designed to take in a burgh of a totally different kind with a great historical record. It was held in the days of Mary on behalf of the French interests, and she resided there. It was besieged by the English, and, as illustrating the historical continuity of the story, it is only a fortnight ago that a very large meeting was held and addresses given from a mound erected by the English in 1554 for the purpose of battering down the walls of the town. So far from being a suburb or overflow of Edinburgh, Leith has in the past stood out against Edinburgh, and in one happy year it absolutely amalgamated the city of Edinburgh by the capture of Edinburgh Castle. That was in 1573. Charles II. reviewed his troops on the Links at Leith. Cromwell was at Leith. There was a time in the reign of James I. when for a short period Leith was the de facto capital of Scotland, and I think hon. Members will agree that it is rather a tall order to propose to amalgamate it with Edinburgh. Sentiment and tradition have got a very great deal to do with the performances of to-day. Sentiment is one of the strongest springs of action at all times. Take the tradition of hospitality. An hon. Gentleman who cheers is, I remember, a native of Leith.

Mr. FORD: No, Edinburgh.

Captain BENN: But he has family connections with it, and I have no doubt he will be a filial supporter. Many monarchs have landed at the port of Leith. James V. and Mary Queen of Scots were amongst the number. George IV. landed at Leith, Queen Victoria landed there and was received by the Provost of Leith, the Provost of Edinburgh being too late, through some unfortunate accident, to attend the function.

Mr. F C. THOMSON: Queen Victoria landed at Granton.

Captain BENN: I am speaking of the landing in 1842. I am glad to say that the hon. Member who has just interrupted is also a distinguished son of Leith, to whose support we confidently look forward. This glorious tradition of hospitality was, I am glad to say, suitably maintained during the War. Since the Armistice no less than 50,000 prisoners of war were received by the civic authorities at Leith. Day after day, in extremely inclement weather, those men, after their great sacrifices, were welcomed by the citizens of Leith, and if hon. Members had been present they would have been touched at the gratitude shown by those poor men who, for the first time for many years, were welcomed on their native shores. I submit that these traditions have been of value to this country and of service to our national cause. Take the tradition in the matter of industry. Leith has industrial traditions which, I submit, it would be great folly to destroy. There is, for instance, the tradition of shipping, which has nothing at all to do with an inland city like Edinburgh, but which is proper and appropriate in the case of Leith. The biggest ship of the Middle Ages was floated at Leith in 1511. The Scottish Navy was founded there, and some of the great names of the men of that Navy still survive in Leith. The tradition of shipbuilding has persisted from that day to this. James I. caused the Union flag to be flown for the first time in Leith in 1666. The spirit of independence and of industrial adventure has persisted throughout the ages. The first steamship to cross the Atlantic left from Leith and arrived at the other side a few hours in advance of the "Great Western." Leith has been visited by the great preachers of Scotland. As an illustration of its industrial spirit, I may mention that Leith sent a steam-engine called "The Perseverance" to compete with George Stephenson's "Rocket." Unfortunately, or fortunately, George Stephenson's was deemed to be the better engine. Leith also has an interest in aviation, as the first balloon flight in these islands was made in the town I have the honour to represent.
The House may say, these are matters of sentiment which should not be taken into account, but I ask why not? It may
be said that they have no value, but go to the evening schools at Leith and you will find the same type of men engaged in teaching youths to build ships and how to engage in technical and engineering operations. You will find men who have come straight from the shipyards instructing the boys who will later on go into those yards. Is it right that such a town should be joined with a large agricultural area and a city in which seafaring and all that it means will count for very little? This shipbuilding enthusiasm and technical skill was of the greatest service to this country during the War. After the battle of Jutland some vessels came to Leith to be repaired. Leith was busy in shipbuilding during the whole of the War and there was hardly any sign of any dispute between masters and men. Leith has been a gallant and patriotic borough doing its duty and doing it effectively. Leith men were renowned for their execution at the battle of Bannockburn. I suppose Leith is the only Burgh in 9.0 P.M. the Kingdom that has received an ultimatum from the naval forces of America, as Paul Jones attacked Leith in 1779 and actually delivered an ultimatum to the Provost demanding that Leith should be surrendered. So throughout the whole story of the Napoleonic wars Leith was to the fore. The shipmasters of Newhaven volunteered and did themselves such credit that a special medal was awarded to them, and I believe is still worn, for the services which were then rendered. The War record in the late War of the Burgh of Leith will compare with that of any other burgh in the whole of the United Kingdom. When the tank came to Leith, in four days £21 per head of the population was raised, which was a very creditable record. In the rich city of Edinburgh in six days £14 per head was raised, which was also a good record, but not so good as that of Leith. Of the 15,000 men in this burgh who served, 11,000 went voluntarily, and in addition many thousands were employed by the shipyards and not allowed to go to the War, but 4,000 only were conscripted out of the 15,000 who served, and of those 15,000 every seventh man was killed. That is the carrying on of the great war-like tradition of this old and honourable burgh, and it should be no surprise after what I have said for the
House to know that an enormous sum has been raised in a few weeks by the Provost—£35,000 in this small burgh—as a memorial for the gallant sons of the burgh who fell.
How can this House tolerate the suppression of this burgh merely on the ground of some geographical expansion, and not on the ground of real necessity? Lord Rosebery, speaking of this Bill, referred to it as the Prussianism—a much stronger word than I should care to use—of Edinburgh, and said:
If Leith is willing to surrender her individuality and illustrious traditions as an historic city, she will deserve her fate. What advantage or honour Edinburgh expects to reap from annexing free communities strongly opposed to the absorption is a mystery.
I would compare that utterance of Lord Rosebery with another, which says:
I hear there is a petition to make Leith a Corporation distinct from Edinburgh, which request is so just that I hope it will be granted, that town having been under the greatest slavery I ever saw.
That was a letter addressed by one of Cromwell's officers in 1652 to Speaker Lenthall, who was occupying the Chair of this House at the time, and so through the centuries one gets the admission of the independence of the burgh. The onus of proof in regard to this Bill lies with my hon. Friend who supports the Bill. He has got to show either that we do not manage the affairs of the town well, or that the need of Edinburgh is urgent, or he has got to show some good public ground before he can ask us to approve of the Bill. I may say here that I shall propose to follow the unbroken practice of this House, which is that, while ventilating the views of the House on Second Reading, they will permit any proposal by private promoters to be examined by the judicial machinery of this House. It is not from any want of confidence in the opinion of the House as being ripe for expression now that I shall not ask for a Division to-night, but, as my hon. Friend knows very well, it is an improper thing when private promoters bring forward a Bill for the issue to be settled here until it has been examined by a Committee.
I must remind my hon. Friend that Edinburgh has got to make a case. Can he say that there is any public demand
in Edinburgh for the Bill? Has he ever had occasion to canvas the citizens of Edinburgh on behalf of the proposal? We have canvassed the citizens of Leith with the most startling results, and as far as I know there are many public men even in Edinburgh who take the view that it is not right to bludgeon Leith into a coercive union which she does not desire. Is there any real need of the City of Edinburgh for this expansion? Is her life being strangled or shut in, or confined in any way so as to make it impossible without this expansion? Of course, the hon. Member cannot answer that question. The Lord Provost of Edinburgh said that the trouble there was a stationary population, and a non-expanding assessable rental. That is not a reason for expansion. Because they have a non-expanding assessable rental and a stationary population, it is no reason why they should be acquired at the expense of Leith. In the same way one of their councillors—Councillor Stevenson—said:
What I wish to emphasise is that the development of the district is not dependent on the inclusion of Leith.
Therefore, the ordinary case for amalgamation, which is that they must expand in the interests of good government and the healthy life of the community, does not exist at all in this case. I do not want to speak harshly of any proposal made by the capital of Scotland, but I think it really arises from a scheme which might have been very proper before the War—a grandiose, ambitious scheme of expansion, with docks, coal mines, and so forth. They want to get docks, a seaboard, a coal field; they want to make the East of Scotland equal in influence and power in its co-ordination with the West. Those are laudable ambitions which in the ordinary way I should be the very last to oppose; on the contrary, I should be very sympathetic, but I put it to the House that this is not the moment, if there is no urgent public need, for framing ambitious schemes which must involve a very large expenditure of the ratepayers' money.
The Edinburgh City Chamberlain, in giving his evidence, said it would add considerably to the debt. As I have pointed out already, the loan charges for Edinburgh have increased by four times in the last 24 years, while those for Leith have decreased by two-
fifths. I want to say this, not critically, but I must point out to the House that in the financial estimates which have been made by Edinburgh from time to time in promoting these Bills a considerable lack of precision has been displayed. The bridge which they said would cost £60,000 actually cost £213,000; the city hospital which they estimated at £130,000 actually cost £300,000. I have no complaint to make of that, but I say it should be considered by this House when the city comes forward with a great scheme of expansion and invites Leith to share in a new burden of outlay. Leith is a thrifty commercial burgh which does its work well, and which only asks to be permitted to go on in a frugal manner suited to the spirit and needs of the times. Since the last Bill was introduced in this House Edinburgh's common good has decreased from £400,000 to £311,000, while Leith's common good has increased by 100 per cent., from £16,000 to £32,000. This is a fingerpost which shows that the burgh is well and thriftily administered.
My hon. Friend may say, "Well, look at the rates." He may say that the rates of Leith are higher in the total aggregate than those of Edinburgh. I would remind the House that in this calculation many charges are omitted which might fall upon Edinburgh. There are also many of which the public will soon be relieved. For instance, there is the superannuation fund which represents 1½d. in the £1. This comes into the scheme which has been already agreed to. Then the endowment of the schools must be taken into account. There is an enormous debt of £2,000,000 which will have to be renewed in 1924, and which is not likely to be renewed at the same rate of interest. There is also a very important feature as affecting Leith. This is that the Leith debt is fixed for much shorter periods. That is characteristic of the affairs of business men when dealing with finance as against the easier way of a large city which is not necessarily of so businesslike a character. In the payment of Edinburgh's debt there would not be so great a relief. I would warn the House against an argument of that kind. During the War the development of trade on the east coast, and especially with regard to Leith, was temporarily arrested, but it is now being restored and raised gradually to what it was before, and the
revenue from the docks in the form of contributions to the rate will also be restored. I suggest that this is not a moment for the House of Commons to consent to an ambitious scheme which is founded upon general principles without regard to the facts of the case. It has been shown that Leith has been remarkable for the thrifty management of its affairs and has reduced its debt charge. When a scheme like this is put forward, Leith, therefore, should be encouraged and not extinguished. Can the hon. Member quote any precedent for an independent burgh being treated in this way absolutely against the wishes, almost unanimously expressed by its citizens. In 1838, after two inquiries, the House conferred independence upon Leith. In 1896 its independence was attacked again by Edinburgh and the House decided in favour of Leith. It was given a separate education area, and in 1918 the Boundary Commissioners granted the separate Parliamentary burgh to Leith and declined to include it in the City of Edinburgh. The whole of the inhabitants are practically united in begging this House to agree that Leith shall not lose its independence. [An HON. MEMBER: "No, no!"] I can give the figures of the plébiscite that was taken on the Bill. In that poll 88 per cent. of the electors voted: 30,000 voted against amalgamation and only 5,000 in favour. I think that comes very near unanimity. Why should the wishes of the people who have done so well be ignored and suppressed in this Bill? I submit that there has been no case made out for the Bill. There is no precedent for the taking away of the independence of this historic burgh, which is of a different character from the city and should not be joined to it. I have shown that it has done well in administration, in commerce and in war, and in its own efficiency, and I think the wishes of the inhabitants should have due weight with the House.

Mr. W. GRAHAM: I think I express the feeling of Scottish Members when I say that we regret to find ourselves in opposition to the hon. and gallant Member for Leith (Captain W. Benn) with regard to a problem of this kind In the course of his speech he has geographically gone as far as the Equator and historically back to the 16th century. A large part of his speech was devoted to historical matter, and I think that will
force many of us to the conclusion that the case of Leith is, partly at any rate, not going to be decided upon present-day facts. He quoted a long series of interesting incidents which had no particular reference to this Bill. I cannot hope as an inexperienced Member of this House to equal the hon. and gallant Gentleman either in his historical research or in the wit and power of his address to this assembly. But I submit that that was not directed to the purpose of this Bill, and cannot very well be dealt with in this Debate. What we have to do, I think, is to make a primâ facie case for the Second Reading of the Bill and for its reference to a Select Committee of the House. All the facts that he referred to, historical and geographical, are matters which may come before that Select Committee. Therefore I shall not attempt to reply to the numerous questions that he has put. Indeed, I had great hesitation in speaking at all, because the hon. and gallant Gentleman had apparently satisfied himself that he has gone over the points of the speech that might be made in reply to him, and consequently it is hardly necessary for me to say very much. But I want to try to describe in outline the main facts, as we see them in the City of Edinburgh, which we submit to the House in making this primâ facie case for sending the Bill to a Select Committee.
There is no suggestion of a predatory attack by Edinburgh upon Leith. We do not attack the administrative efficiency of the burgh. The whole case for this Bill is not a local case at all, but it is really a case based upon broad national considerations at the present time, and I think it says much for the capital of Scotland that it should have undertaken an enterprise of this nature immediately after the War, an enterprise which is destined to confer real benefit in the economic development of our native land. The Bill proposes to amalgamate with Edinburgh the burgh of Leith. It is a proposal by 320,000 people, approximately, to take in 85,000 people in an adjacent district. Really they are one community, and it is from that point of view that we regard this problem. It is proposed to take in also certain suburban areas of Midlothian. These are the two proposals. Originally some of them were not in favour of this measure. There were thirty-nine peti-
tions of opposition. That opposition has now dwindled down to four petitions, and even in the burgh of Leith, the parish council of Leith have now no opposition, and the Trades and Labour Council, representing the working classes, has just passed a resolution in general support of the principle of the Bill. So that my hon. and gallant Friend, notwithstanding all the eloquence and historical research, and the undeniable wit and charm of his speech, if I may say so, has not correctly represented the state of feeling in the burgh. Division does exist, and we are entitled to plead that for the purpose of our Debate now. There is, beyond that, a point to which my hon. and gallant Friend has made no reference at all. He has absolutely failed to refer to the fact that the community of interests affecting 400,000 people—320,000 in Edinburgh and 80,000 in Leith—has already been recognised in the provision which has been made for the supply of gas and water in that area. Gas in the combined area of Edinburgh and Leith and water in the same area are regulated in their supply by what we call trusts. The Edinburgh and Leith Gas Commissioners and the Edinburgh and District Water Trust are composed in the main of representatives of the town council of Edinburgh and the town council of Leith, but, for all practical purposes—and this is the important and essential consideration—these trusts, which govern and control a very large part of the finance, of the provision for public needs in that area, are not directly responsible to either corporation. They exist as curious, separate entities, with power, more or less, in their own hands, and the effect of that system at the present time is to withdraw from the control of the Corporation of Edinburgh 85 per cent. of the expenditure in this matter of the supply of gas and water.
My hon. and gallant Friend has made a very strong point of the democratic case. I remember well, some years ago, a leading Scottish newspaper saying of a then distinguished Member of this House that he was "bonnie on democracy." I have been powerfully reminded of that phrase in many of the arguments which have been applied by my hon. and gallant Friend, but nobody in Edinburgh has ever suggested that these trusts are democratic institutions in the strict and fair
sense of that term. We make no charge against their efficiency. We do not suggest they have failed in their duty, but we plead very strongly indeed that they are not amenable to the ratepayers of the locality, that they cover great interests affecting the lives of the ratepayers, and that direct access, direct representation, is the only thing which we can tolerate for such a purpose. The object of this Bill, if it succeeds, as we all agree it will succeed, will be to restore to the combined area of Edinburgh and Leith a municipal status, to wipe out the existence of these separate trusts, and really to achieve a great democratic principle. From that point of view we, and not my hon. and gallant Friend, are the real democrats in this matter. Not only that, but under this Bill there will be supplied water for a considerable section of the county area of Midlothian. I do not require to weary the House with any proof that such supply is urgently necessary. No one denies that it is required for rural development and the general progress of Midlothian. From the general point of view it is essential in that district. That proposal is a part of this Bill, and is at least in itself an argument why the case should be very carefully considered by a Select Committee. In these times of economy, we hear a great deal about the value of unifying administration, and I observe that my hon. and gallant Friend has made no reference at all to that side of the problem.
I confess that it would be difficult to imagine any case in this country where the immediate results of a Bill are so far-reaching as they are in the case of the Bill which the Edinburgh Corporation is now proposing. In the area as it exists at the present time we have no fewer than 15 separate administrative authorities. Under this Bill, the 15 separate authorities would be reduced to three. Not only that. We have 10 rating authorities in the district at the present time to be replaced, if this Bill is carried out, by two, and instead of 33 rating areas, we propose to establish one. There cannot be the slightest doubt that, from every point of view—from the point of view of economy in administration, from the point of view of the unification of the district which is really one—it would be difficult to cite any case which, at one blow, wipes out
such a great network of administration of all kinds, and establishes a real gain to the community on the lines we propose. My hon. and gallant Friend has said nothing at all about that side of the problem in a period when we are all discussing the value of efficiency in administration, and the supreme need of wiping out every form of unnecessary expenditure in the State.
I am bound, in plain duty to the great city we have the honour to represent, to make what case I can. My hon. and gallant Friend referred to precedent. We are as proud of Leith as Leith is proud of Edinburgh; there is no conflict at all on that point. But if we were to adopt the hon. and gallant Gentleman's principle, it would follow that no communities could ever be amalgamated, or, at all events, that would be the almost inevitable effect of the general adoption of such a principle. We do not require to dig away to the 16th century, or to ascertain how any king or queen landed, for this part of our discussion. We can take the year 1912 or 1913, when Glasgow took in the burghs of Govan and Partick with 89,000 people in the one case and 66,000 people in the other. There is also the case. in 1913, of Dundee and Broughty Ferry, and there is the case, of approximately the same date, of Dunfermline. I think I am correct in saying in all those cases there was opposition, but the thing which overrode the sentiment and the feeling, and the justifiable attitude of large numbers of people in those localities, was the undeniable public gain which was to be achieved by the adoption of a scheme of amalgamation. It is entirely on that ground that we present our case to-night. Beyond that, we submit that this Bill is demanded by the course of the Government's legislation in at least four spheres, namely, the spheres of housing, transport, electricity, and public health. Housing demands more and more larger areas, and Leith is incapable of expansion in any direction save out into the sea. Housing demands it. In the sphere of transport, to which my hon. Friend has referred, the experts tell us that we depend upon a continuous expansion of the trams, and the avoidance of all short disconnected lines such as are inevitably bound up with the artificial separation of these two communities. I need not emphasise from the point of
view of the Electricity Bill the importance of the larger areas. The whole spirit, the whole tendency of that Bill, is in the direction of larger areas of supply and of providing for the needs of a greater number of people and for a variety of industries and interest. That is precisely what we propose to do with the electrical plant in the city of Edinburgh now; indeed, to confer all the advantages of our foresight, our thrift, and our enterprise upon 80,000 of our neighbours—if they will only give us the chance. These things are bound up in this Bill. A greater case of benevolent interference seems to me absolutely impossible to describe.
In conclusion, reference has been made to the democratic principle. My hon. and gallant friend has referred to the plebiscite. There is no doubt whatever that we must pay a tribute to the natural and justifiable sentiment of the people of Leith. I have said sufficient already to show that we are actuated by no animosity towards them; but at the present day economics and general political tendencies dictate the course which we are adopting in this Bill. Sentiment perishes every hour in our lives, and we require to make way for unity. In point of fact, we are really trying to provide an environment better and more up-to-date for that very sentiment upon which my hon and gallant Friend has expended so much eloquence to-night. The plebiscite undeniably was against amalgamation; but we must remember this was not a ballot of the people, but a plebiscite taken by people who are opposed to amalgamation. We have had no secret or private ballot on the usual lines so far as the ratepayers of Leith are concerned. Not only that, but, as I have already emphasised, the Parish Council of Leith is not opposing this Bill, and the Leith Trades and Labour Council, representing the organised labour of that burgh, has handed to us a statement which I need not read, but which is in support of the measure we are now discussing. The democratic principle! But is it unfair to argue in this Debate that we must have regard to the interest of this district as a whole? In the district of Edinburgh and Leith there are approximately 400,000 people. There is a very much larger number of people if we take into account the Midlothian area. I am perfectly safe in saying to my hon. and gallant Friend that the over-
whelming majority of the people in that district are in favour of amalgamation. They believe amalgamation is necessary, not merely from the point of view of the economic development of the district, but because they think—and, I believe, rightly think—that the whole prosperity of the two communities, and not least Leith, and certainly the Firth of Forth, is bound up in this measure. The wishes of 400,000 people, or a very large majority of the 400,000, are surely entitled in a democratic age to override even the just and fair sentiment of one section of that community, which is really now united, but which holds out so far against this proposal. That is the case on which we base our defence of the democratic principle in Edinburgh, at all events, and in the wide area surrounding. I need only emphasise, in conclusion—and this is really our strongest point—that the reference to a Select Committee for this Bill is necessary, not merely for Leith, not merely for Edinburgh, not merely for the development of the Firth of Forth, but it is absolutely necessary for Scotland itself. Time and again in our experience we have felt that if we had a united community, we, on the East Coast of Scotland, could play a very much larger and very much more useful part in the economic relations with other countries than we can play if we remain artificially divided as we are to-day. On these lines, and with great respect, I submit that we have proved our case for a reference to Select Committee, and for the Second Reading of this Bill. I understand from my hon. and gallant Friend, in his almost expiring remarks, that he does not propose to risk a Division on this occasion.

Mr. FORD: What impels me to get up at this comparatively late hour to speak on a subject which I feel cannot be of vast interest to the bulk of this House, but which is of great interest to us, is that I am not only a Member of one of the Divisions of Edinburgh, whose citizens have honoured me with their confidence, but I was also born and bred a citizen of Edinburgh, and am of Leith extraction. I do not propose to follow my hon. and gallant Friend, who, with that magnamity which marks the English race, has offered the services of his intellect and wit to our less enlightened citizens of the North. I do not propose to follow him into his historical re-
searches, for some of them seemed to me to be quite irrelevant to the case at issue. I think many of the excellent points he made, from his point of view, were very adequately answered by my hon. Friend and Colleague the Member for Central Edinburgh (Mr. W. Graham). I want to say this: it seems to me that the hon. and gallant Member for Leith made a great deal of the matter of sentiment, and I should like just for a few moments to deal with the question of sentiment from the point of view of common sense kindled by local patriotism. Having these two relationships with Edinburgh and Leith, I should like to put it from that point of view. What we have got to look beyond is any little temporary difficulties and differences, to the expansion and ultimate good to be derived by the two neighbourhoods. I yield to no one in my admiration for all that Leith is and all that Leith has stood for in the past, and for the possibilities of Leith. But if Leith is going to cut itself deliberately off from the expansion of its larger neighbours and friends in Edinburgh, it is going to do itself a bad turn. It would suffer much more than Edinburgh. But I should like to see both of them acting together in a spirit of good fellowship, which is really apart from such political controversies as this has always marked the two.
Just one practical point of illustration. My hon. and gallant Friend talked about the marvellous response that Leith had made in contributing towards the war memorial. But all the neighbours in Edinburgh were circularised to contribute towards that memorial. I say that out of no hostility to Leith, but to prove that we had both one common interest in one common sentiment, and that when it comes to such a solemn matter as honouring our gallant dead, we are prepared to work together. I contend on the sentimental question that this is a factious opposition which has been worked up by those working to the disinterest of Leith, and it is not in the interests of Edinburgh. I think we ought to make up our domestic quarrels, and cement a union which is not only geographical, and incidentally I would like to say, if I am permitted, that I would be prepared to bet my hon. and gallant Friend—[HON MEMBERS: "Order!"] that I could put him down in a place on the borders, and he would
not know whether he was in Leith or Edinburgh, the two are absolutely geographically bound together It is only in administration that there is separation. The sentiment of the two places is bound up together, their interests are one, and in the interests of the development of that great industrial centre in Edinburgh, we feel that we must take the two together to produce what will be a worthy capital of Scotland as a centre of development in all respects, both commercial, educational, literary, and artistic. By that means we are going to secure what appeals to all Scotsmen, a practical saving in cutting down by about one-half the expenses of administration. For these reasons I intervene to say that, as one qualified to speak for both parties interested, I think the best sense of both communities is that they should work out, not only their own salvation, but their development together.

Bill accordingly read a Second time and committed.

GAS RE0047ULATION BILL.

Postponed Proceeding resumed on consideration of Order for Second Reading.

Mr. BRIDGEMAN: I beg to move, "That the Bill be now read a Second time."

Mr. HOGGE: On a point of Order. I wish to point out to you, Mr. Deputy-Speaker, that we are now interposing another Order in the order of our Debate to-day.

Mr. DEPUTY-SPEAKER (Sir E. Cornwall): The hon. Member, I presume, will resume his speech.

Mr. BRIDGEMAN: This point was raised before in the Debate.

Mr. HOGGE: May I point out that these things are done by arrangement, and the arrangement between the official sides of the House was that if the Edinburgh Boundaries Bill did not take from 8.15 to 11 o'clock we were to continue the Debate on the Agriculture Bill. That arrangement was made this afternoon, and we were to continue the discussion tomorrow on the Agriculture Bill, and not go on with the Gas Regulation Bill. Many hon. Members interested in the latter Bill do not know that it is being
taken now, and they are away on the ground that we are only taking private business. I submit that unless there is some substantial reason for interposing a new Bill now this measure ought not to be proceeded with.

Mr. DEPUTY-SPEAKER: The Agriculture Bill is not even on the Order Paper, and therefore it does not arise.

Mr. BRIDGEMAN: I would like to refer to what the hon. Member for East Edinburgh has said.

Mr. DEPUTY-SPEAKER: I think it would be better not to, because it is not on the Order Paper.

Mr. BRIDGEMAN: This Bill, the Second Reading of which I am now moving, is being taken in accordance with an arrangement made last night, an account of which is printed in the OFFICIAL REPORT. It is a measure introduced in response to a great many appeals from gas companies and in accordance with the promise made by the late President of the Board of Trade (Sir Auckland Geddes) that he would carry out the recommendations of the Fuel Research Board with regard to economy of coal in so far as gas is concerned.
The Report of the Fuel Research Board concerning gas may be summarised as follows:—
That the standard for charge should be by thermal units instead of cubic feet. The unit of charge to be a therm, that is, 100,000 thermal units. A thermal unit is the amount of heat required to raise 1 lb. of water 1 degree Fahrenheit.
That there should be a test by standardised machinery recognised by the Board of Trade. At present these are only made after due notice has been given to the undertakers.
That the gas should contain no sulphuretted hydrogen and that there should be a limit to inert or incombustible constituents.
That the undertakers must declare the calorific value they undertake to supply and give notice of any change in calorific value in a manner which will allow the consumers an opportunity of stating their objections, and in the event of such change the undertakers must provide for the replacement or adjustment of appliances.
Lastly that the pressure shall be two inches on any main.
Those are the recommendations of the Fuel Research Board and every one of them is being carried out in one or other section of this Bill. It refers to gas undertakings carried on both by local authorities and statutory companies. There are 831 of these undertakings, of which 312 are carried on by local authority, and there is £140,000,000 of capital concerned. These companies are subject to certain restrictions and they have to fulfil certain obligations. The cost of fulfilling those obligations has, owing to the increase in the cost of coal and the increase in wages and general expenses, enormously increased since the period before the War, and although there was during the War a Bill carried allowing increased charges (50 per cent. in the case of local authorities), it was only a temporary measure for two years. I think everybody will agree that the conditions now are entirely different from those prevailing at the time when the companies were set up. The same obligations still rest upon them, but the cost of carrying them out is doubled, and it was manifestly unjust that they should be subject to the same restrictions, although their obligations have so enormously increased. It is also necessary that confidence should be restored in order that they may get the capital required to carry out their duty. It is necessary that some kind of permanence should exist. This Bill gives the Board of Trade power not only to alter the standard from one of cubic feet to one of calorific value, but also to enable the authorities to increase their charges proportionately to what the increase of expense has been since the beginning of the War. The effect will be that they will have the same profit-earning capacity as they had before the War, and those who worked under a sliding scale will still work under that scale, which regulates the amount of dividend they pay above the standard by the cheapness of the gas they sell, a most excellent system if it existed for the benefit of the consumer in a great many other industries there could be no profiteering. Another provision is that three Gas Referees shall be appointed by the Board of Trade and one Chief Gas Examiner. Local gas examiners will be appointed by local authorities. They will have decisions to take, and if their deci-
sions are appealed against the appeal will be heard by the Chief Gas Examiner.
The expense of carrying out these examinations and tests, and of keeping accounts, will be borne from a fund to be raised by a levy on the greater undertakings. Under the Bill no concern which does not produce over one hundred million cubic feet of gas in a year will be subject to the levy. I am informed that that covers practically 90 per cent. of the gas that is used in this country. They will be subject to such a levy as is necessary for the carrying out of this work. There is to be an advance by the Treasury, but it will not be an ultimate charge on the Treasury; it is only an advance to pay expenses until the levy is raised and until arrangements have been made to make the system self-supporting. The rest of the Bill contains Clauses as to penalties and enabling certain things to be done by special order which were previously done by Provisional Order. There are also general provisions as to fees, as to the standardisation of tests, the standardisation of the machinery by which the tests are to be carried out, and as to accounts and rules. It is not necessary for me to say more about the details of the Bill. In the correspondence I have received, it seems to be generally admitted that this is a fair Measure. The criticisms have been aimed not at the main provisions of the Bill, but at details which can be discussed in Committee. The Government are perfectly prepared to listen with impartiality to any criticisms that may be made in Committee. I believe the general opinion of the House is strongly in favour of the Bill having a Second Reading, and I hope it will get it to-night. The situation in the gas industry is a very uncomfortable one at the present moment. A strike is threatened in the industry, and the only possible way of being able to pay higher wages will be by some such Measure as this. Unless the companies are enabled to get a reasonable economic price for what they produce they cannot meet the demand for higher wages now being made upon them. I hope that the Bill will be read a Second time to-night, and that in Committee we shall meet with the same kindly criticism which has reached me in the correspondence I have had on the subject.

10.0 P.M.

Mr. HAYDAY: I desire to take this opportunity of supporting the Second
Reading, while reserving my criticisms as to details for the Committee stage. This is an industry which is, I suppose, in a quite unique position as compared with any other important national industry in this country. Those early statutory provisions which reduced the dividends as the prices charged increased and increased dividends as the charges to the consumer fell, were no doubt most excellent provisions for the period when they were made, and had they not existed during the War it might have been necessary to have a fixed maximum price. But I must candidly say that I know of no industry that has been so handicapped by reason of those very statutes as the gas industry. We have had constant increases in the cost of coal, with corresponding reductions in the value of the by-products. That has now reached a point when dividends are at a low minimum, and development, so far as the companies are concerned, is out of the question, because they cannot attract new investors. There is another and perhaps equally serious side to the picture, which I want particularly to mention in supporting the Bill. The hon. Gentleman said that the gas industry is at the moment in a very serious condition because of a threatened dispute. Recently the Press have been asking why it is that Government Departments allow a long period to elapse before they intervene. During the past three or four months these negotiations have been going on, and they say, "Let the public know really whether these wage demands are reasonable. If they are, they should be met. Can the undertakings afford to pay? If they cannot, let us know why." There is truth in both those statements. The gas worker, the by-product man, the man engaged in distribution, have at the moment actually anything from 6s. to 10s. less of war-time advances than the lowest of the national awards yet conceded. Their conditions generally as regards week-end overtime—they are seven-shifts-a-week men; they work right through the seven days—are worse by far than in almost any other industry. When we appeal for equal treatment nationally for these men with that under the Engineering and Shipbuilding National Awards during the period of the War and up to the present moment, we are told by the companies that, if this
is forced, it means cracking up the companies altogether, because they cannot pay without going into the Bankruptcy Court. On the other hand, there is the point of view of the men who are called upon to face the heat of the retort-house, with regard to which I heard a well-known reformer say that he would as lief take a brief passage through a much warmer place which is frequently mentioned, as remain for eight hours in a retort-house. They have to face this excessive heat, great strain, and also all the increases in the cost of living. The men say, "Why should we be called upon to pay these extra charges, and yet be restricted as far as our wage returns are concerned, because the companies work under Acts of Parliament, and cannot charge for that which they produce a sufficient economic rate to enable them to give reasonable wages to those whom they employ and a fair profit to themselves. Whilst giving this Bill a Second Reading cannot prevent notices going in on Saturday, or on Monday at the latest, I do hope that special facilities will be given to it, that it will have a quick passage through Committee, will come down again for Third reading, and finally pass into law, so that some arrangement may be made before the 26th June to prevent, firstly, a national stoppage in an important industry upon which manufacture mainly depends in many areas, and also the possibility of that spreading into the twin industry of electricity, and so causing serious trouble, because of the hardships inflicted both upon the employés and upon the companies by these restrictive Acts of Parliament, which have retarded progress in this very important national industry.

Major BARNES: I can quite understand that the hon. Gentleman desires to get the Second Reading to-night, but I am sure he does not deprecate entirely any discussion whatever upon the Second Reading. It appears to me that it is rather an extraordinary thing for a measure of this importance, and it is one of vast importance, should be expected to pass through the House without any hon. Member being permitted to say a word upon it. It is one of a whole series of measures to which the House has been
giving its sanction, measures dealing with all the great undertakings in the country which are under statutory limitations, and measures dealing with tramways, ports, docks and harbours, and now we come to one dealing with gas undertakings, and I have no doubt before long we shall have one dealing with water undertakings. Everyone in the House, whether he sits on this or that side of the House, recognises that all undertakings which are under statutory limitations are at present passing through a period of very great difficulty. They are restricted in their charges. They are not restricted in the increased costs to which they are subjected and they are all in a very critical financial condition, and that leads to very great difficulty in dealing with the authorities who are running the undertakings and the workmen who are employed, and I am sure every hon. Member is willing that these undertakings shall be extricated from that position. I have not risen to speak in any degree in opposition to such a proceeding, but I am entitled to point out that in this Bill the Government is proceeding to treat these gas undertakings differently from the way in which it has been treating other undertakings. I think the Bill is an improvement upon some of the Bills we have had submitted to us. In the first place there is no distinction drawn between undertakings which belong to local authorities and those which do not. That distinction has been drawn in connection with tramway Bills and in regard to the Electricity Bill, and hon. Members on this side of the House have protested against the distinction. We thought all such undertakings, whether they belonged to local authorities or not, should be treated in the same manner and I am exceedingly glad to see that the Government has recognised that principle, and this is an indication, in a small measure perhaps, of what we have seen in very much larger matters and in more important directions, that principles advocated in this quarter of the House have eventually been adopted by the Government. I cannot imagine that they desire to treat one class of undertaking differently from another and we may therefore reasonably expect that this Bill indicates their intention to put all such undertakings, not only gas but tramway undertakings, belonging to local authorities on the same footing as those which do not.
Then we have been told by the Minister in charge of the Bill that the intention is not to depart from the very admirable sliding scale arrangement which was instituted by Parliament in the past for the protection of the consumer of gas That sliding scale arrangement means that every increase in dividend must be accompanied by a reduction in the price of gas, and, as the hon. Gentleman (Mr. Bridgeman) pointed out, if a provision of that kind had been applied in a great many other directions, we should not have heard so much of profiteering as we have done. Every hon. Member will be glad to know that it is not the interest of the Government to depart from that. I do not know whether the House realises that this Bill purposes to do what in a great many other directions the House has resented and disapproved of, and that is to take the Parliamentary powers which it has exercised in the past and invest them in the President of the Board of Trade. I should like to ask why there has been a difference instituted in this Bill in that direction. All the other measures which have been put before us have been merely temporary measures in connection with tramways and docks and harbours, vesting in the responsible Minister for the time the power to make modifications in charges, and leaving it open at the end of a period of two years or more for these undertakings to come before Parliament in the ordinary way to present their Bills in order to make their charges permanent. In other words, power was taken from this House, and bestowed on the Minister simply for the period of emergency through which we were passing. Under this Bill all the powers which have been exercised through Parliamentary Committees in the past and through Provisional Orders confirmed by this House are removed from it and bestowed on the President of the Board of Trade, and a special order by the Board of Trade takes the place of Provisional Orders made and confirmed by this House. That appears to me to effect a policy which we may hope to see altered in Committee.
There is one other matter which is perhaps of greater importance. This Bill is in two parts. The first part deals with the modification of charges, and when it
comes into operation it will relieve the gas companies and their employees from the very difficult situation in which they find themselves. Very little has been said about the second part of the Bill, which may prove to be the most important part of the Bill, and that is that a restriction is to be put upon the manufacture of gas, which may have very serious effects. It is a very technical matter, but it is an exceedingly important question. Up to the present time the manufacture of gas has been under certain restrictions. It was bound not to contain sulphurated hydrogen and there are other restrictions. On the whole it has been fairly satisfactory, but now there is a provision placed in the Bill that, in addition to these things, gas cannot be manufactured or sold which contains more than a certain proportion of inert matter, or in-combustibles. That may carry very little information and may make very little impression upon the layman, but those hon. Members who have received a pamphlet which has been circulated will, if they have given it any attention, have seen that, in the opinion of some very competent gas engineers, the effect of this restriction is going to be exceedingly serious. The effect of the contention in the pamphlet is that the restriction will prevent cheap gas being made. The argument that if this restriction is not inserted in the Bill it would be possible for the manufacture of gas to be continued in a way that would allow its sale to be made at one-third the cost that will be necessary under the conditions laid down in this Bill. That is a serious matter at the present time. The use of gas is a factor in the cost of living, and it is becoming an increasing factor. There is not a home in the country in which it is not used, and this House cannot regard with unconcern any proposal which any competent authority says will raise that cost by three times the amount.
So far as I can follow it, the real reason for this restriction is that it has direct relation to by-products. If this restriction is inserted the effect will be that it will ensure a considerable supply of coal tar, whereas if it is not inserted, and the process of manufacture of cheap gas is encouraged, the result will be that we shall not have the same amount of coal tar as a bye-product that otherwise we should get. I realise the importance of an adequate supply of coal tar. It forms
the basis of the dye industry, and it is required for a great many other purposes, but the coal tar supply should not be secured at the expense of the ordinary gas consumer. We should have some provision by which if the Board of Trade are going to impose this restriction the domestic consumer may be protected. [HON. MEMBERS: "Agreed!"] There may be some Members of this House who are entirely indifferent to the interests of the ordinary consumer, but the point which I am making is one which affects the interests of the great mass of the people of this country. Those who use gas on a large scale in the great industrial works may adopt mechanical dilution and secure for themselves cheaper gas, but that is outside the power of the ordinary domestic consumer. The hon. Gentleman in charge of this Bill has expressed his willingness in Committee to consider and accept Amendments. I hope that the Government will be prepared to accept such Amendments as will permit gas to be manufactured in conditions which will ensure to the working classes of this country an abundant and plentiful supply.

Sir FORTESCUE FLANNERY: I am sure that the House is glad to hear the hon. and gallant Member (Major Barnes) both on the subject of the taxation of War fortunes and the quality and price of gas. As a director of a gas company for something like 20 years, I endorse on behalf of the gas trade generally the action of the Government in having brought in this Bill. As regards the two points which have been referred to by the hon. and gallant Member, the powers which the Board of Trade will obtain of making Provisional Orders regulating the working of the gas trade are powers no larger than those which the Board of Trade already possess in regard to the mercantile marine. They are purely for testing the gas and seeing that it is of a certain quality, and protecting the consumer, and are confined entirely to certain administrative details of manufacture. The hon. and gallant Member referred to the limitations of air and other gases in the ordinary gas. That is a provision which possibly will have to be modified, but which will be dealt with fully in Committee, so that it need not be discussed at the moment. Broadly speaking, this Bill will substitute for the old-fashioned method of charging by volume the fairer
and more honest method of charging by heat-power. The number of heat units in the gas will be the basis of charge. The old system was that, whatever the volume was, the charge was so much per cubic foot, whether the gas was good or bad. The new system will surely be a benefit to the consumer as well as to the manufacturer. As someone has spoken on behalf of the workers in the gas trade and another hon. Member has spoken largely on behalf of the consumer, I thought it my duty, on behalf of the gas trade generally, to say that the Bill is believed to be for the public benefit and that there is no objection to its general principles, subject, of course, to amendment in Committee.

Sir F. BANBURY: I do not intend to go into the question whether gas should be made with air or air made with gas Those are Committee points. I agree with the hon. and gallant Gentleman opposite that a Bill of this importance, even if it does take 30 or 40 minutes of time, cannot be considered to have occupied an excessive amount of time. I understood, apparently wrongly, that the object of this Bill was to put the shareholders in a better position than they are in now; that owing to the great increase in the expense of making gas it was impossible to carry on the undertaking at a profit unless some measure of this sort was introduced. I understand that there is a dispute, of which I was unaware, between the gas workers and the gas companies, and that it is in order to give these men higher wages that the consumer has to pay more for his gas.

Mr. BRIDGEMAN: I am sure that my right hon. Friend does not wish to misrepresent me. I did say it was in order to give the companies the same profit-making opportunities that they had before the War. I said that the state of the gas industry was such that there was a strike threatened at the moment, and that it would be quite impossible—whether it was desirable or not I did not say—to raise wages if restrictions which may have been just before the War were retained.

Sir F. BANBURY: The last thing I wish to do is to misrepresent my hon. Friend. I did hear the concluding remarks of his speech, and he did say that there was the threat of a strike, and that unless this Bill was passed there would be a strike.

Mr. BRIDGEMAN: No, I did not say that.

Sir F. BANBURY: I understood that that was so. [HON. MEMBERS: "Agreed, agreed!"] I do not know why hon. Members are in such a hurry. If they want to go to bed let them go home. This is a proposal apparently to enable higher prices to be charged in order that some people may get higher wages, but that is a process which will have to come to an end some day. There is also under this Bill the proposed appointment of more officials. Why on earth cannot the Government bring in a Bill which does not appoint more officials? An hon. Member says they are not to be paid by the Government, but they have to be paid by somebody, and the fewer officials we have the better. There is always somebody to be appointed to interfere with somebody else's business, and I strongly object to that.

Bill accordingly read a Second time, and committed to a Standing Committee.

FIREARMS BILL [LORDS].

Order for Second Reading read.

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): I beg to move, "That the Bill be now read a Second time."
This is quite a short Bill and one which in all probability will commend itself to the House and be regarded as non-controversial. The Bill has two objects. In the first place it deals with the possession and carrying of firearms by ordinary individuals, and in the second place it deals with the question of the manufacture and sale and export of firearms and explosives, in order to carry out a national obligation by which we are bound under a Convention signed in Paris last February. The first proposals of the Bill are designed to maintain greater control so that, as far as possible, criminals or weak-minded persons and those who should not have firearms may be prevented from having these dangerous and lethal weapons. As far as possible we have provided that legitimate sport should not be in any way hampered, and so that any person who has any good reason for possessing firearms, or as to whom there is no objection, may be entitled to have them, but we hope by
means of this Bill to prevent criminals and persons of that description being able to have revolvers and to use them. I need only remind the House of the numbers of cases that have happened within the last 12 or 15 months of the holding-up of post offices and other crimes of that sort in which firearms were used by the criminal. I feel certain that the House will agree that so far as that object is concerned it ought to be carried out if possible. There is a provision in the Bill that anyone who desires to possess firearms has to obtain a permit from the police officer of his district where he would be known. That is not a very serious obligation to impose upon the ordinary citizen when the object is to protect the lives and limbs of the citizens generally. With regard to the manufacture and sale of firearms, provision is made for registration, so that people who manufacture or sell these weapons or the explosives which are necessary for their use will be able to show exactly what they have manufactured and what has become of them. With regard to the question of the exports, which we are bound to regulate by our pledge under the Arms Convention, we have quite sufficient powers at present, under the Customs Act of 1879, to prevent the export or import of arms, but in order to make it more secure and more efficient we have taken power to regulate the removal from one place to another of arms and explosives, so that there will be a control kept upon all arms that are manufactured, so that they cannot be exported or imported in an illicit or secret manner. It is, of course, of the greatest importance that we should be able to prevent people manufacturing munitions of war, because that is what it comes to, and supplying them to other countries, secretly; for example, to countries to whom we are pledged.

Lieut. - Commander KENWORTHY: Hear, hear, Poland!

Mr. SHORTT: And to Russia, for use in Persia, for example, so that we may be able to prevent them going to semi-civilised people who use them for the purposes of aggression or persecution. We have had representations made to us by the Gun-makers' Association, who have pointed out various matters which will require amendment in Committee We have gone into them very carefully. None of the Amendments, substantially
speaking, which they have suggested, in any way weaken the provisions of the Bill, and they do safeguard the legitimate interest of those who manufacture sporting guns and rifles and so on, and those who use them. We hope the House will accept in Committee, if it gives this Bill a Second Reading, certain Amendments which we propose to bring forward for the purpose of meeting the suggestions of the Gun-makers' Association.

Mr. HOGGE: Is it a Government Bill?

Mr. SHORTT: Yes. Lord Onslow brought it in in another place, on behalf of the Government, for the purpose of saving time. It provides, as I say, by the use of certificates given by the chief police officer in any area, for regulating, as far as possible, the possession or carrying of firearms, and by the use of registration and certificates regulating the manufacture and export and import of firearms, so that we may, as far as possible, avoid the dangers which are undoubtedly attendant upon the indiscriminate carrying of and trading in revolvers and fire-arms. We are bound by the Arms Convention at Paris, to bring in the measure, in so far as it relates to exports and imports. The other part is equally important in our own domestic interest.

Mr. HOGGE: I should like, first of all, to make what I think is quite a fair protest against taking this or any other Bill to-night in view of the statement with regard to business for to-day made by the Joint Parliamentary Secretary to the Treasury last night. He said that the first part of the sitting would be devoted to the Motion of the right hon. Gentleman the Member for the Platting Division (Mr. Clynes), and that the Government hoped that time would be found afterwards for the Second Reading of the Gas Regulation Bill. Therefore, the Government did not hope to get more than that Bill, and, as hon. Members know, there was some division of opinion about it. This Bill deals with a very wide subject, which is made even wider than it was originally intended on account of the fact, for example, that in Ireland we have practically a state of civil war. I have only looked at the Bill within the last 10 minutes, because we were only informed a short time ago that the Government hoped, in addition to the
Gas Regulation Bill, to take not only this Bill but also the Sheriffs (Ireland) Bill and the Bank Notes (Ireland) Bill. I would not argue that it is not the duty of every Member of the House to be here. Obviously, that is the assumption, and, therefore, every Member ought to be cognisant of the business that is proceeding, but I would venture to appeal to my right hon. Friend whether he is not satisfied with the fact that the Government have got the Gas Regulation Bill and not to proceed further with these other Orders. Otherwise, this Bill must be examined, and examined very closely, in the 20 minutes that are left to us. Unless my right hon. Friend be prepared to exercise the Closure, there is not the faintest hope of getting the Second Reading tonight. If the Bill had been confined to the mis-use of fire-arms, apart from any political or other considerations, the whole House would have been willing to have given permission at once, because the whole House feels that there is far to free access to arms by irresponsible individuals. I do not know whether hon. Members have a copy of the Bill in their hands. I do not suppose that they have.

Sir F. BANBURY: I have.

Mr. HOGGE: Probably the right hon. Baronet and one or two others are the only Members who are supplied with copies of the Bill. Clause 16 refers to its application to Ireland. It says:
This Act shall apply to Ireland, subject to the following modifications:—

(1) A reference to the Chief Secretary shall be substituted for any reference to a Secretary of State;
(2) The expressions 'police district' and 'chief officer of police' respectively mean in the police district of Dublin metropolis that district and any of the commissioners of the police for that district, and elsewhere any district for which a county inspector of the Royal Irish Constabulary is appointed and such county inspector;
(3) For the purposes of this Act a court of summary jurisdiction shall, except in the police district of Dublin metropolis, be constituted of a resident magistrate sitting alone or with one or more other resident magistrates;"


and so on. An hon. Gentleman below the gangway says "Quite right," and he has, probably, Ireland in his mind, and he has, quite rightly, in his mind that somebody in Ireland ought to have the power to restrain people from carrying firearms,
which may be right or wrong when we are discussing the thing in another direction, but when we know that the Resident Magistrates might grant the use of firearms to one class of people and absolutely deny it to another class—

HON. MEMBERS: "No!"

Mr. HOGGE: Will hon. Members try to look at it in the same light as myself? The last thing I want to do is to raise any political controversy over this matter. I am only pointing out that this is a Bill in which, I think, the Home Secretary wants to deal with the misuse of firearms—the prevention, for instance, of a desperate criminal having access to arms, so that he can provide himself with a means of offence against peaceful citizens—and there is the bigger question which must arise on a Bill of this sort, namely, the political aspect. We do know the Home Secretary was himself for some time the Irish Secretary, and he knows something about the condition of Ireland; in fact, most of us know far more about the condition of Ireland at the present moment than we care to know, and we would be all glad if by some miracle the Irish question would resolve itself into some kind of peaceful solution. But, putting that out of account, it is a Bill which deals with firearms, and if you take Ireland as one example you are bound to have a certain administration of this Act, which may be political and, I think, in his experience as Irish Secretary, the right hon. Gentleman will agree that that is a fairly possible outcome of the powers that are given in this Bill. Then he tells us that, among other things, it is to prevent the secret manufacture and the secret sale of arms to other Powers with which we may be on friendly relations. Does my right hon. Friend really at this time of night wish us to raise such a case as that of the "Jolly Roger"?

HON. MEMBERS: "The 'Jolly George.'"

Mr. HOGGE: Hon. Members correct me, and say it is the "Jolly George." I think it might be more correctly called the "Jolly Roger." That vessel was loaded with arms. You cannot really deal with that question under a Bill termed
An Act to amend the law relating to firearms and other weapons and ammunition,
and to amend the "Unlawful Drilling Act, 1819.
My right hon. Friend will see at once that this is an international question of great importance. Personally I do not see anything to prevent this country manufacturing munitions of war and arms, and supplying them to neutral countries, if we are not in a state of war. From the international point of view a question of that kind would have to be considered. For instance, at the beginning of the War, America supplied this country with munitions, and we were glad to have them from that neutral country. The question was quite freely discussed in this House. My right hon. Friend let slip a remark to the effect that this Bill would prevent that sort of thing. Does it really give the Government power—is the Government really seeking the power—to deal with a question of that sort, that manufacturers of guns, ammunition, aeroplanes, ships, or submarines are not to be entitled to sell them to countries which are at war though we are neutral? If he will say that that is not the intention of the Bill, that this Bill is really only a police Bill to prevent anybody, schoolboy, or burglar, or other person, fooling about with firearms, then the House of Commons will give him a Bill of that kind any time he likes to ask for it.

Mr. PALMER: I congratulate my hon. Friend, the virtual Leader of the Opposition, on his solicitude for Ireland. I should have thought that that party in this House which absents itself when the question of the better government of Ireland is under consideration might well remain silent when this question of saving Ireland from the murderous conditions which exist there to-day is being discussed. I am perfectly prepared to give my hearty support to the Government on this Bill. Surely the condition of affairs shows the necessity of giving the Government greater powers to deal with the use of firearms? The outcome of this War has been the present condition of things, in which life is held very cheap. I take it that this Bill is an attempt at restriction, which my hon. Friend on the Front Bench seems so anxious shall not be the case. This is to me a most amazing thing at a moment when I see in the newspapers of this day the terrible story of the infamous conduct of the unfortunate
person who is now dead, and who used firearms at every turn, and when death is in the face of every policeman to-day, and when in Ireland, as we know, the use of firearms means that Sinn Fein is able to carry on this campaign of murder and outrage in defiance of the Executive Government of the country. My hon. Friend with whom I so often agree rather missed his opportunity tonight by making a carping and unnecessary criticism against this Bill. This measure has come down from the House of Lords where it has been well considered, and I hope that the Government will persist in their effort to get the Second Reading to-night. We are not in any carping opposition spirit; when the Government do the right thing some of us who were returned as independent men are determined to support them. If what be called the opposition would take a more intelligent part in our proceedings, some of us who sit as independent Members would listen to them with more consideration, but when we find a Bill which, however defective, is honestly designed for the better government of Ireland, absolutely ignored by the Opposition and by the members of the Labour benches, then, I say, they have no warranty when the Government bring forward a measure of this sort to put down outrage and murder and remove from the hands of wild and extravagant men the power of inflicting wounds and death, and it is our duty as independent men to support the Government and regard the Opposition criticism as merely factious, irritating and irresponsible.

Mr. KILEY: During the War we were accustomed to panic legislation being brought in during the closing hours of the sitting, with a good deal left to the discretion of the Minister. Under Clause 13 the Secretary of State may make rules and laws and regulations, the administration of which would be in his own hands. It has been my misfortune to have had a good deal to do with the Home Office administration, and I have no hesitation, after the experience I have had of three or four Home Secretaries, in saying that I regret any further powers being left to the present Home Secretary, because my experience of him has been that he has always taken the strictly legal view, and anything in the nature of a sympathetic view of his duties has been entirely absent.
For that reason I am unwilling to leave anything more to the right hon. Gentleman's unfettered discretion. There are other points of view in connection with this proposal. I have seen this afternoon a deputation from a useful body of men known as pawnbrokers, who came to demand the reason why it is proposed in this Bill to prevent any person having one of these weapons in his custody, from being able to put it in a place of safety. According to one of the Clauses of this Bill, that will not be permissible. He must not put it in a place of safety. He must apparently, if no other opportunity presents itself, use it on any person who comes in his way. I am not sure that retaining in this Bill a proposal of this kind will be helpful, or strictly fair to pawnbrokers, who have carried on their business apparently in the past to the satisfaction of the country. Why should they be specially tabooed from carrying on their business? There are other points of view to be considered. What are the proposals for dealing with the export trade, especially in view of what is known as sporting or agricultural implements which are not of a dangerous kind? Those who have any knowledge of the export trade, especially with our Dominions, must be aware that from South Africa and Australia it is the practice to send indents to agents in this country for goods of this character which may be required. I want to know what action is to be taken in this regard and what steps will be adopted to enable the export of these things to be satisfactorily carried out as in the past. If we are to pass much more of this type of legislation we shall be presently getting the reputation earned by the inhabitants of another country who from morning till night complained that they were subject to rules, laws and regulations. There seems to be much in this Bill which is likely to bring about a similar state of things in this country. If the object of this Bill is to bring to an end cases of burglary in which dangerous weapons are used, there is much to be said in its favour. If there is a dangerous burglar who desires to obtain possession of firearms, surely an easy method for him to obtain such weapons would be to burgle a place where they are kept in stock, and he could then get them in a wholesale way. It cannot, therefore, be necessary to pass
such a drastic measure as this in order to deal with a case of that character. If the Home Secretary is really serious in this Bill, and proposes to limit it to the purpose announced by him as its primary purpose, to carry out undertakings that the Government have entered into with other Powers, then I think there will be no opposition so far as this side of the House is concerned. But the Bill goes far beyond things of that kind. While it achieves no useful object, so far as I can see, it does interfere with a legitimate trade and with legitimate traders. So far as burglars are concerned it will really have no effect. These men are dangerous, but there is nothing in this Bill which will adequately deal with them. That is my point of view.
Let us look at Clause 1. It says:
A firearm certificate shall be granted by the chief officer of police of the district in which the applicant for the certificate resides if he is satisfied that the applicant is a person who has a good reason for requiring such a certificate.
If this police officer does not like the look of this individual, he may decline to grant permission. It may be a shot gun. This person may well be—

It being Eleven of the Clock, the Debate stood adjourned.

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.

RESIDENT MAGISTRATES (IRELAND) [MONEY].

Committee to consider of authorising further payments out of moneys to be
provided by Parliament for the salaries and allowances of Resident Magistrates in Ireland, and of amending the law relating thereto. [King's Recommendation signified.] To-morrow.—[Mr. Shortt.]

GAS REGULATION [EXPENSES].

Committee to consider of authorising the payment out of moneys to be provided by Parliament of such expenditure as may become payable under any Act of the present Session to amend the law with respect of the supply of gas, for remuneration and expenses of gas referees for two years after the passing of such Act. [King's Recommendation signified.]—Tomorrow.—[Mr. Shortt.]

BUSINESS OF THE HOUSE.

Motion made, and Question proposed, "That this House do now adjourn."—[Commander Eyres-Monsell.]

Mr. HOGGE: May I ask the Home Secretary, in order to make sure about to-morrow, whether we resume on the Agriculture Bill, and, after that Bill, what other business it is proposed to take?

Mr. SHORTT: We shall begin with the Agriculture Bill, and, after that, if there is time, we shall take any other Orders that we can.

Mr. HOGGE: In the order on the Paper?

Mr. SHORTT: As far as possible.

Adjourned accordingly at Three Minutes after Eleven o'clock.